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House Democrats to Renew Push for Worker Misclassification Bill

Sept. 26, 2019, 1:11 AM

House Democrats later this year will re-introduce a bill that would penalize companies that wrongly classify their workers as independent contractors rather than employees.

The measure, the Payroll Fraud Prevention Act, was most recently introduced last year by Rep. Mark Takano (D-Calif.). Democrats plan to roll it out before the end of the year, according to a House Education and Labor Committee aide. The core provisions of the bill will remain the same, but it is unclear who will be the legislation’s lead sponsor.

The bill comes as Uber, Lyft, and other gig economy companies have been embroiled in legal disputes over their classification of workers as independent contractors. That designation means the workers aren’t protected by minimum wage and overtime pay requirements, don’t have the right to unionize, and aren’t eligible for workers’ compensation and unemployment insurance benefits.

Gig companies recently led an unsuccessful lobbying blitz against a new California law that makes it harder to classify workers as contractors.

Classification questions have also plagued construction and a wide range of other industries.

Previous versions of the bill would have amended the Fair Labor Standards Act to require employers to accurately classify workers and double the liquidated damages for unpaid wages owed to those wrongly treated as contractors. The bill also would have banned businesses from retaliating against workers for challenging their classification.

Additionally, the legislation would have amended the Social Security Act to require state unemployment insurance agencies to take a closer look at worker classification. It would have required the Labor Department to conduct audits of industries with frequent incidents of misclassification.

House Focuses on Workers’ Rights

The bill is part of a broad legislative effort from House Democrats to revamp federal labor law and broaden legal protections for workers and unions. Like other measures, it is unlikely to attract much attention in the Senate, where the Republican majority has widely resisted new legal obligations for employers.

The Democrat-majority House has already passed measures designed to fight pay discrimination (H.R. 7), prevent on the job bias against LGBT workers (H.R. 5), raise the federal minimum wage to a $15 an hour (H.R. 582), and ban forced arbitration (H.R. 1423).

Other legislation pending in the House includes the Protecting the Right to Organize Act (H.R. 2474), which was approved by the Education and Labor Committee Sept. 25, and two bills focused on preventing bias for older and pregnant workers. The Protecting Older Workers Against Discrimination Act, which would make it easier for workers to prove discrimination or retaliation claims, was approved by the committee June 11.

The Education and Labor Committee is slated to hold a hearing on the financial costs of misclassification Sept. 26.

To contact the reporter on this story: Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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