What is the Payroll Fraud Prevention Act?

The Hill reported recently that Democrats in Congress have introduced the Payroll Fraud and Prevention Act to combat instances of employee misclassification. Photo of newspaper

The news source reported that the bill would penalize companies that misclassify workers and violate long-standing labor laws. As we have been reporting in our blog, employee misclassification has become a hot-button issue.

Many companies, including transportation and technology businesses, have been accused of misclassifying employees as independent contractors, which results in them missing benefits like tax withholding, health insurance, overtime pay and unemployment insurance. This saves companies money, even though it may be illegal.

The Payroll Fraud and Prevention Act was introduced in Congress this July and still needs support. The bill “would encourage companies to classify more workers as employees rather than independent contractors.”

According to The Hill, under the bill, employers would be required to notify a worker of his or her classification in a written document. If a company failed to do so, the worker would be considered an “employee”. The bill would also allow workers who have been misclassified a greater ability to recover lost wages, through specific provisions.

“Misclassification cheats hard-working Americans out of federally guaranteed labor rights and benefits, such as overtime pay, minimum wage, and family and medical leave,” said Rep. Frederica Wilson (D-Fla.), who introduced the bill, according to The Hill.

Has Your Position Been Misclassified?

If you believe that you are being misclassified as an independent contractor, you should speak to our Los Angeles labor attorneys. We can investigate your case and determine if an employer acted in an illegal manner.

If an employer has violated the law, you may be entitled to damages including back pay. We support the Payroll Fraud and Prevention Act and other laws that seek to put an end to employment misclassification.

Visit our Facebook or Twitter pages for more information about federal labor laws.

Kesluk, Silverstein & Jacob—Los Angeles employment attorneys