Teamsters Applaud Iowa Employee Misclassification Crackdown

[Omaha Steve]

http://www.marketwatch.com/news/story/teamsters-applaud-iowa-employee-misclassification/story.aspx?guid={04BD08C0-333F-45AB-96A5-9158FF9B15E1}&dist=hppr

Last update: 1:45 p.m. EDT July 17, 2008

WASHINGTON, July 17, 2008 /PRNewswire-USNewswire via COMTEX/ -- Executive Order Explores Illegal Underground Economy
The International Brotherhood of Teamsters today applauded Iowa Governor Chet Culver for signing an executive order to explore employee misclassification among Iowa companies attempting to cut employee and state benefits to illegally save millions of dollars each year.

Culver's signing of Executive Order 8 would create a five-member Independent Contractor Reform Task Force to study employers' attempts to exploit workers and avoid paying millions in taxes to the state. By classifying employees as "independent contractors," employers avoid paying into Iowa's unemployment insurance, worker's compensation insurance, and temporary disability insurance while limiting employee rights at the workplace.

"Governor Culver took a step in the right direction toward ensuring that hardworking families and law-abiding employers will once again be protected from tax cheats throughout Iowa," said Teamsters General President Jim Hoffa. "Employers intentionally misclassifying workers illegally funnel tax dollars into their own pockets, forcing the majority of Iowans to pick up the tab on this illegal underground economy."

The order makes Iowa the latest state to establish a task force to study employee misclassification in the country. In New York, a task force estimated that at least 10 percent of employers audited practiced employee misclassification, costing the state over $550 million in the construction industry alone. At the federal level, the Internal Revenue Service late last year fined FedEx Corp. $319 million in back taxes due to misclassification practices

"At a time when states face difficult fiscal decisions, like cutting healthcare for seniors or school aid for our children, employers are abusing the system to pocket huge financial windfalls," Hoffa said. "The Teamsters will work with the task force to make strong recommendations to identify and eliminate this practice."

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.
SOURCE International Brotherhood of Teamsters

http://www.teamster.org

[Adsos Letter]

1. Good!

In California the move by many employers to classify construction workers as "independent contractors" has put unwarranted pressure on a lot of workers to "go with the program." A relatively small increase in gross wages was offset by having to pick up normal employer costs. In order to receive an "advantage" employees had to do without prudent protections: insurance, unemployment, worker's comp., etc.

All I ever saw it do was place more money in the employer's pocket while forcing "contractors" to assume risk.