2768696779807872572 2008 was a year of task forces, new legislation, lawsuits, a settlement and oh yeah..a new President Elect. To start off, the results of task forces on worker misclassification were presented to the governors of Michigan and Iowa. In both cases, the results indicated that 1) states lose out important tax revenues, 2) misclassification provides an unfair advantage to businesses who abide by the law and 3) misclassified workers are deprived of worker benefits such as workers compensation, overtime and other employee benefits. Doesn’t this sound familiar? It’s somewhat surprising that these task forces are created with taxpayer dollars yet at the end of the day their findings surprise no one.
Task Forces weren’t the only things being created in ’08. New legislation aimed at curbing worker misclassification also took center stage. H.R.6111 and S.3648. were introduced to amend the Fair Labor Standards Act requiring employers to keep records on non-employees who perform services and to penalize employers who misclassify employees as non-employees. Both bills were cleared from the books since they were introduced in a previous session of Congress. You can bet with the new administration coming in that these bills will be introduced and may see there way onto the President’s desk if they can get passed the committees, the House and the Senate.
You’re probably wondering why lawsuits were being mentioned as a highlight in 2008 when they happen so very often. The reason is because one of them was poised to change the entire landscape of newspaper delivery carriers while another poses a legitimate threat to a multi million dollar entertainment and media company. First, Freedom Communications dba The Orange County Register settled a class action lawsuit brought on by the home delivery carriers who deliver the newspaper with a payout not to exceed $22 million. The settlement keeps in tact the home delivery carrier’s status as independent contractors which the Orange County Register has maintained all along. The second lawsuit involves a group of former wrestlers suing World Wrestling Entertainment (WWE) for misclassifying them as independent contractors. Though the thought of a wrestling misclassification suit sounds somewhat wild, it could dramatically alter the manner in which WWE does business with its performers. Currently, all performers are independent contractors and are responsible for their own travel and lodging however WWE controls their appearance and manages their gigs. Something has got to give and it’s a good bet that we’ll hear more in ’09.
2008 was especially kind to 203 current and former drivers for FedEx who received a settlement of more than $14 million ($27 million total with the remaining $12.5 going to attorney fees and court costs). FedEx decided to “put the matter behind them” and they still believe that they have not participated in any wrong doing. FedEx may have more in store for them in 2009 as litigation on behalf of 27,000 drivers marches its way through U.S. District Court. It would surprise no one if when 2009 comes to a close FedEx is the one left holding the package.
Finally, there was a change in the oval office. Barack Obama was elected as the 44th President of the United States. President Elect Obama receives mention since he has sponsored two bills targeted at worker misclassification. As mentioned earlier in the blog, both bills are destined to be reintroduced and should they find their way to the President, there will be not one bit of hesitation to sign them. 2009 is setting up to be a big year involving worker misclassification. If you’re an employer truly take the time to understand the difference between an employee and an independent contractor. Don’t just trust your instincts. If not, you may see your company’s name mentioned in this blog and that would not be a good thing.
Happy New Year and May Your Business Prosper.

]]> 12:48 PM Friday, January 2, 2009 A. Chavez aaronrchavez@gmail.com 2009_01_01_archive.html#2768696779807872572