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Employers reduce labor costs by misclassifying workers who should be on their payroll as employees, and instead calling them independent contractors. This employer payroll fraud was exhaustively documented by Mandy Locke and her team of reporters in the News & Observer’s series “Contract to Cheat” last fall. It costs the state millions of dollars in unpaid payroll taxes, leaves our unemployment insurance system without revenue to cover unemployed workers, and deprives workers of health insurance,

One of the most damaging consequences of employer payroll fraud is that injured workers are without workers’ compensation insurance. By purchasing so-called “ghost worker” policies, employers can avoid providing real coverage to their workers. Too often, this practice takes place in dangerous industries like construction, which just last year experienced 19 worker fatalities in North Carolina.

Tracking down what appears to be a negligible problem with worker’s comp claims is a misdirected effort. There are many things the General Assembly could do to combat payroll fraud, including worker’s compensation fraud, including increasing penalties for employers who violate the law, beefing up state agency enforcement and collaboration, and providing better enforcement tools such as stop work orders.

Commentary

construction workerCheck out the News and Observer’s extensively documented series, Contract to Cheat, on the obstacles faced by workers who are misclassified, and how they are being failed by the government agencies that are supposed to protect them.  The Justice Center released a report on wage theft, which includes misclassification, in 2013.

State leaders are, at last, vowing to do more.  They had an opportunity to do so in 2011 and 2013, with legislation introduced by Rep. Rick Glazier to increase penalties for employers and inform workers of their legal rights.  Rep. Larry Hall also introduced a bill in 2013 that would have created a fund to help workers whose employers fail to carry workers’ compensation insurance as required.

There is a whole host of things the General Assembly and state agencies could do that would go a long way toward fixing this problem, including:

  • Increase penalties for employers who misclassify their employees
  • Provide workers with information at the time of hire about how they are being classified, what that means, and their right to be correctly classified
  • Workers should be presumed to be employees. If a worker is to be treated as an independent contractor, the company who hires that worker should have to prove that the classification is correct.
  • The NC Department of Labor should go after employers who misclassify and should be allowed to issue stop work orders against those who don’t carry workers’ compensation coverage
  • North Carolina should have a fund to help workers whose employers fail to carry required workers’ compensation coverage
  • The Division of Employment Services, Department of Revenue, Industrial Commission, and Department of Labor should systematically share information about employers who misclassify workers.

For more information about the legal rights of misclassified workers, look at the Justice Center’s fact sheet.

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farmworkerIt’s National Farmworker Awareness Week: Time to celebrate the dedication and strength of the people who plant and harvest our food.  Farmworkers are exceptional people in so many ways: their incredibly hard work, the courage of many of them in seeking a new life in another country, and their persistence in the face of so many challenges.  Unfortunately, farmworkers are also exceptional in a way that no one wants to be.  Agricultural exceptionalism is a well-established concept in American law – the notion that agriculture is somehow so different from other industries that this justifies treating agricultural workers in ways we would not dream of treating other workers.

What does agricultural exceptionalism mean for farmworkers?  For starters, no entitlement to overtime pay for hours worked over 40 (and there are many of those long hours during peak harvest season). There’s also no minimum wage for labor done on a small farm. Farmworkers who join together to press for better living and working conditions don’t have federal labor law protections. Children as young as 10 can legally work in the fields. And most North Carolina farmers are not required to provide workers’ compensation for their employees, who toil in one of the most dangerous jobs in the country.

Let’s take this Farmworker Awareness Week to support those who push to make farmworkers unexceptional, including:

Please use this Farmworker Awareness Week to join their fight.

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A grand jury in Greensboro last week handed down a 41 count indictment against the owner and operator of a firm that brings in foreign workers for temporary agricultural and non-skilled jobs in North Carolina and around the Southeast.  According to WRAL, the indictment charges Craig Stanford Eury and Sarah Farrell of International Labor Management Corp. with submitting fraudulent visa applications in an attempt to evade caps on the number of workers who can enter the country on H-2B visas and moving workers on agricultural H-2A visas into non-agricultural H-2B positions.

Much has been written about the problems with the H-2B and H-2B programs.  The Southern Poverty Law Center’s seminal report, Close to Slavery, details the exploitation at the heart of a “guestworker” system which ties workers to a single employer and provides no way for them, many of whom leave families year after year to perform thankless work in the U.S., to ever create a permanent home here.  The unfair treatment of U.S. workers who don’t get a fair shake at these jobs are described in Farmworker Justice’s No Way to Treat a Guest.  Hopefully those messages will not get lost in stories about an indictment that focuses on sleight of hand tactics to game a system that is, at its core, patently unfair to the workers (immigrant and U.S. citizen workers alike) who just want to support themselves and their families.

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Farmworkers 2In anticipation of your Thanksgiving feast tomorrow, consider sharing this essay about the people who made it possible:

Safer food, farmworkers and families
By Fawn Pattison, Executive Director, Toxic Free NC

As we sit down to Thanksgiving dinner this week, many of us will say a prayer of thanks for the hardworking people who harvest our food. While we enjoy the harvest’s bounty, we also reflect on those who work hard in the fields, facing many dangers and often not earning enough to put food on the table themselves. That’s why Thanksgiving week is also designated as International Food Workers Week.

This week a coalition of farmworker supporters is launching a new campaign to keep farmworkers safe from one of the biggest hazards they face on the job: exposure to toxic pesticides.

Check out http://protectfarmworkers.org/ and add your name to the petition calling on the federal government to fix the outdated pesticide rules that are failing to keep workers – and us – safe from exposure on the job. Read More