Tough Independent Contractor Misclassification Bill Introduced In Senate

Misclassifying independent contractors would be considered payroll fraud under legislation introduced by Chairman of the Senate Subcommittee on Employment and Workplace Safety, Bob Casey (D-Pa.). The Payroll Fraud Prevention Act of 2013, co-sponsored by Sens. Tom Harkin (D-Iowa), Sherrod Brown (D-Ohio), and Al Franken (D-Minn.), would make misclassification of employees as independent contractors a federal labor offense and create a new category of workers – non-employees – covered under the Fair Labor Standards Act. Casey said the bill is not meant to penalize unintentional misclassification, but attorneys with Pepper Hamilton LLP write that close examination of the legislative language shows “even good-faith misclassification would still constitute a violation” and result in heavy fines.