Sorting Out Worker Misclassification

December 16, 2019


Sorting Out Worker Misclassification

The increase in gig workers has more companies testing the teeth of worker misclassification rules. They’re about to come under the gun in California, but some construction contractor practices may get a pass.

Tom Zind | Nov 18, 2019

It’s a match made in heaven — at least on paper: workers who increasingly long to be “free agents” and employers who salivate at the prospect of reducing the many costs that come with maintaining traditional employees. That’s the recipe for the possible growth of the “gig economy,” in which more workers move from being employees to independent contractors, ostensibly handing workers the freedom and flexibility many crave while freeing employers from some of the financial burdens of being, well, employers.

Some of the allure of gig work has been abating as workers complain of exploitation — such as Uber drivers — and employers rediscover the management advantages of having full-time, dedicated employees. But independent contractor arrangements continue to be a force in the evolving labor economy — nowhere more so perhaps than in the construction contractor sector, where the practice has a long history.

Related: NECA Supports Legislation to Curtail Worker Misclassification








Broadly, though, it’s drawn the probing, wary eyes of legislators, regulators, and even prosecutors, who are lifting the hood to find loads of trouble in worker’s paradise: namely, that many workers are actually being taken advantage of by companies breaking labor laws, cheating on pay, not paying their fair share of taxes, and fostering an uneven playing field in their industries.

Related: 2019 Electrical Salary Survey and Career Report

At issue is worker misclassification, describing when workers enter into labor arrangements that bear all the marks of a standard employer-employee relationship but are treated as off-payroll, independent, self-employed contractors. Doing so frees companies from paying the employer’s share of payroll taxes, unemployment and workmen’s compensation insurance premiums, and extending benefits such as health insurance and overtime pay.


New Jersey Passes the Broadest Wage Theft Law in Country With Dire Consequences for Employers – Attorney Advertising

August 12, 2019


Introduction: On the heels of the broadest Pay Equity law in the country, New Jersey has just passed the broadest wage theft law in the country, which is certain to lead to increased litigation. Unwary employers may not only be facing insurmountable fines and penalties, but potentially jail time for even minor violations of the new law. The new law establishes treble damages and criminal penalties for non-payment of wages to New Jersey employees. More importantly, there is a presumption of retaliation for any adverse employment action that occurs for months after an employee complains about their wages. The presumption is rebuttable, but only if the employer produces clear and convincing evidence. The law further extends the statute of limitations to six years and allows for reinstatement of employees.
Under New Jersey’s Wage Theft Act (the “Act”), employees who prevail in proving their employer owes them wages or engaged in retaliation can recover the wages owed plus liquidated damages in an additional amount equal to up to 200 percent of the unpaid wages, in addition to reasonable costs and the employee’s attorneys’ fees. The Act also increases the statute of limitations from two years to six years.Employers Face Treble Damages and Six-Year Statute of Limitations

The Act also creates a cause of action for employees who are discharged or otherwise subjected to an adverse employment action in retaliation for making a wage theft claim. Employers must offer reinstatement to the discharged employee or take other action as needed to remediate the retaliation. A rebuttable presumption is created where the adverse action occurs within ninety days of the employee filing a complaint with the New Jersey Department of Labor and Workforce Development or bringing a claim or action for violation of wage payment laws. The presumption can only be rebutted by clear and convincing evidence that the adverse action was taken for other non-retaliatory reasons.

Criminal Penalties

The Act establishes harsher penalties for employers who violate the New Jersey Wage Payment Law. Employers who knowingly fail to pay an employee the full amount of wages agreed to or required by law, or who retaliate against an employee for making an internal or external complaint, participating in a proceeding relating to wage payment laws, or because the employee has informed another employee about wage and hour rights under state law, violate the Wage Payment Law and face penalties as follows:

  • First Violation – the employer is guilty of a disorderly persons offense and faces a fine of $500 to $1000, imprisonment of 10 to 100 days, or both.
  • Second Violation – the employer is guilty of a disorderly persons offense and faces a fine of $1000 to $2000, imprisonment of 10 to 100 days, or both.
  • Third and Subsequent Violations – the employer is guilty of a crime of the fourth degree and faces a fine of $2,000 to $10,000 imprisonment of up to 18 months, or both.

Employers may also face criminal penalties for violations of the wage theft law. Under the Act, an employer’s failure to pay compensation as agreed within thirty days of the date due is a disorderly persons offense and carries a $500 fine and 20 percent penalty. Subsequent offenses carry penalties of $1000 plus 20 percent of wages owed. Effective November 1, 2019, employers who have been convicted of violating the law on two or more occasions are guilty of the crime of a “pattern of wage nonpayment” which is a third-degree offense.

Employers’ Bottom Line:


Warner Session focuses on air, traffic control with MWAA

June 7, 2019

Warner Session is chairman of the board for the Metropolitan Washington Airports Authority

Article provided by   – Special Projects Editor, Washington Business Journal

When it comes to airline travel, Warner Session doesn’t have too many pet peeves. That is, unless the person seated in front of him decides to lean their seat back.

“I always get what I call the leaners,” Session says, laughing. Really, who can blame him? There’s a lot that can go wrong with transportation and Session has heard it all as chairman of the board for the Metropolitan Washington Airports Authority. An attorney by trade, Session joined the board in 2011 and considers his role a labor of love as MWAA helps to oversee not only projects at Dulles International and Reagan National airports, but also the Dulles Toll Road and the ongoing expansion of Metro’s Silver Line.

You were raised in California. How did you end up in Greater Washington? After I graduated Stanford, I came back east to go to law school at Georgetown. I had no intention of staying, but here I am 40 years later. I started in the political arena, working for the D.C. Council.

Where did you go after politics? I started my own practice, now Session Law Firm. I always had an entrepreneurial instinct and having worked on the Hill, I made an incredible amount of contacts.

What’s been the focus of your practice? I’ve worked with a lot of federal agencies on their small business programs. I like seeing businesses grow and working with them as they enter the federal arena and all the challenges that comes with trying to do business with the government. I still have a government contracting focus, but I do represent medium- and large-sized companies as well.

How would you describe yourself as a boss? I’m an easy boss. I delegate. It’s pretty easy because I have just one full-time employee.

What advice would you give to someone looking to get into politics or law? Do it. Even though politics is sometimes bad, it’s good to be part of the process. Policies influence our lives in every way.

What sparked your interest in transportation and aviation? When I was working for a member of Congress, we had an oversight subcommittee that she chaired on transportation. We had jurisdiction over the Federal Aviation Administration. The most interesting thing we had oversight of was the bombing of Pan Am 103 over (more…)

Minnesota Passes Sweeping Wage-Theft and Employer Recordkeeping Law

May 29, 2019


Felhaber Larson: Minnesota Passes Sweeping Wage-Theft and Employer Recordkeeping Law

During a special session over the Memorial Day Weekend, the Minnesota House and Senate passed an omnibus bill that creates new civil and criminal penalties for “wage theft.”  The bill also creates new recordkeeping requirements for Minnesota employers, including the requirement to keep a signed “wage statement” for each employee.

Gov. Walz has indicated that he will sign the bill so it will become effective on August 1, 2019.  Here is what the new law will do:

Wage Theft

The new law will make it a crime to commit “wage theft.”  Wage theft is any of the following actions by an employer with “intent to defraud”:

·         failing to pay an employee all wages, salary, gratuities, earnings, or commissions as required by federal, state, or local law;

·         directly or indirectly causing any employee to give a receipt for wages for a greater amount than that actually paid to the employee for services rendered;

·         directly or indirectly demanding or receiving from any employee any rebate or refund from the wages owed the employee; or

·         making it appear in any manner that the wages paid to any employee were greater than the amount actually paid to the employee.

If the value of wage theft exceeds $35,000, a person may be sentenced to prison for up to 20 years, a fine of up to $100,000, or both.
The wage theft protections will apply to actions that occur on or after August 1, 2019.

Revised Recordkeeping and New “Wage Statements” Requirement

The new law includes several additional recordkeeping requirements for Minnesota employers as well as additional authority for the Minnesota Department of Labor and Industry (DOLI) to monitor compliance.


Amazon Intends to Prevent Wage Theft

March 20, 2019


The Amazon representative speaking to the Washington Business Journal said, “We’ve been having some conversations with the building trades, ensuring there is a workforce agreement in place, one of the priorities of that would be wage theft. In Seattle, Amazon expanded by 3 million square feet. We used 90 percent of building trades on that project. That project was delivered on time and efficiently.”



IRS Enforcement Facing Collapse

After Budget Cuts, the IRS’s Work Against Tax Cheats is Facing “Collapse”


October 1, 2018


The following are excerpts from the article:


Last year, the IRS’s criminal division brought 795 cases in which tax fraud was the primary crime, a decline of almost a quarter since 2010. “That is a startling number,” Don Fort, the chief of criminal investigations for the IRS, acknowledged at an NYU tax conference in June.


Bringing cases against people who evade taxes on legal income is central to the revenue service’s mission. In addition to recouping lost revenue, such cases are supposed “to influence taxpayer behavior for the hundreds of millions of American citizens filing tax returns,” Fort said. With fewer cases, experts fear, Americans will get the message that it’s all right to break the law.


“Due to budget cuts, attrition and a shift in focus, there’s been a collapse in the commitment to take on tax fraud,” said Chuck Pine, who used to be the third-ranking criminal enforcement officer at the IRS and is now a managing director at BDO Consulting. “I believe there are thousands of individuals who have U.S. tax obligations and are not complying with U.S. tax laws.”


The result is huge losses for the government. Business owners don’t pay $125 billion in taxes each year that they owe, according to IRS estimates. That’s enough to finance the departments of State, Energy and Homeland Security, with NASA tossed in for good measure. Unlike wage earners who have their income separately reported to the IRS, business owners are often on the honor system.


But the rate at which the agency audits tax returns has plummeted by 42 percent since the budget cuts started. Criminal referrals were always rare and are becoming rarer still, dropping from 589 referrals in 2012 to 328 in 2016. With the government conducting 1.2 million audits in 2016, that’s one criminal referral for roughly every 3,600 audits.


In addition, current and former IRS agents say that audits are not as intensive as they used to be. Because the IRS pushes agents to close audits more quickly, they make fewer requests for records and interviews.


Budget cuts have diminished the criminal investigation division, trimming the number of agents by a fifth since 2010. Recently, the IRS closed four of its 25 field offices, according to Fort. In New York state, home of the country’s financial industry, the revenue service is down to 161 agents, about a hundred fewer than it had 15 years ago.


Representative of the General President
United Brotherhood of Carpenters
and Joiners of America
101 Constitution Ave., NW

Washington, DC 20001
mobile: (203) 231-0398

DLLR Worker Misclassification



At the Construction Roundtable Meeting on June 28th, Kathy Sibbald reported on the Department of Labor, Licensing, and Regulation’s (DLLR) efforts regarding enforcement. She reported that there were 750 work-sites visited resulting in 138 new cases last year.

Sibbald is a DLLR administrator overseeing employment standards, prevailing and living wage, and worker classification protection.

She said the state collected $22,000 in fines and is in the process of hiring four new investigators.

Jim Tudor, program administrator for Prevailing and Living Wage and Worker Classification Protection Unit spoke about the need for contractors to submit the state’s prevailing wage survey.

DLLR Commissioner  Matt Helminiak and Labor Secretary Kelly Schulz also spoke at the meeting.


-Bernie Brill

Executive Director

SMACNA Mid-Atlantic Chapter

Testimony from DC Employment Services – Labor & Workforce Development



Full Video


“Testimony related to the District of Columbia Department of Employment Services (DOES) at the DC Council Committee on Labor & Workforce Development’s Budget Oversight Hearing on April 18th


Please note- testimony from Fred Codding and Vic Cornellier can be witnessed at time 2 hour 07 mins – 2 hour 27 mins.