A report released this week by the Economic Policy Institute (EPI), (In)dependent Contractor Misclassification, lifts up the parade of horribles that goes along with this increasingly common method of cheating workers, taxpayers, and honest business competitors. Author Francoise Carré documents the harm caused by fraudulently claiming employees as contractors includes lost wages and benefits, unpaid payroll taxes and Social Security, and lack of worker’s compensation and unemployment insurance coverage. The effect of worker misclassification on North Carolina was exhaustively researched by McClatchy last fall in their series, Contract to Cheat. According to this new report, worker misclassification is more often found in industries that benefit the most financially from the practice (e.g., industries with high worker’s compensation costs) as well as industries where workers tend to work alone, such as housecleaning or trucking.

Key recommendations include information sharing between state and federal agencies and employer and worker education. However, the report also notes the importance of strong deterrents:

The impact of inspections and audits would be greater if fines for fraud were increased and represented a significant risk for businesses; fines could be calibrated not only to the number of workers affected but to the size of the business that commits the fraud.

Tomorrow, the House Commerce and Job Development Committee is taking up HB 482, the Employee Fair Classification Act. Committee members should look at the recommendations of the EPI report and consider the Contract to Cheat findings as they determine how best to tackle this pervasive problem.


pesticide sprayingOne of the ALEC bills that is making the rounds across the country is so-called “ag gag” legislation, designed to prevent animal rights groups from conducting undercover operations to film abuses of animals on factory farms and research facilities.

In North Carolina, the House has passed HB 405, the Property Protection Act. While not precisely an ag gag bill, the intent to restrict anyone from shedding light on embarrassing or illegal activity appears the same. A person who “intentionally gains access to the nonpublic areas of another’s premises” and commits an “act that substantially interferes with the ownership or possession of real property” may be liable to the property owner for $5000 per day. Also liable is any person who directs another to engage in the prohibited activities.

The primary purpose of HB 405 may be to keep animal exploitation out of the news, a move opposed by nearly three quarters of North Carolinians, according to a recent poll.  The effects, however, could be even more sweeping.  If this bill passes, will a farmworker be able to take pictures of illegal migrant housing conditions to provide to the Department of Labor? Will a tester who does not intend to accept employment be able to apply for a job to test whether illegal race discrimination is taking place? What will happen to the worker who takes a picture similar to the one posted here?


construction workerToday is Worker Memorial Day, a day to honor workers who have died on the job. The recent construction accidents in Raleigh are stark reminders of why this day matters. Worker advocates will gather at 10:30 at 7 W. Lenoir Street in Raleigh, the site where 3 workers died, and will walk to the NC Department of Labor. There they will deliver a letter asking Labor Commissioner Cherie Berry to provide an accurate count of all worker deaths in North Carolina, and to convene the OSHA Advisory Council as required by law. Check out the op/ed today by the NC AFL-CIO’s MaryBe McMillan.


Cherie Berry

It’s a brave new world in North Carolina, where worker fatalities don’t count unless the NC Department of Labor actually investigates them. The News and Observer’s piece yesterday documented another instance of NCDOL’s practice of distancing itself from addressing critical issues facing workers in our state. Last fall, Labor Commissioner Cherie Berry refused comment on how her department could help workers routinely cheated out of wages and benefits because of misclassification as independent contractors.

Now Berry’s office is playing down serious health and safety problems in workplaces across North Carolina by only reporting publicly on a fraction of the workplace fatalities that happen each year. Ironically, the worker misclassification problem that NCDOL didn’t want to discuss is integrally related to these underreported fatalities. The deaths of workers who have been improperly treated as independent contractors are not investigated, and therefore will not be reported on, by NCDOL.

Several legislators have taken note, including bipartisan sponsors of the Fair Competition and Employee Classification Act (SB 576), the Employee Fair Classification Act (SB 694), and the House’s Employee Fair Classification Act (HB 482). These bills propose a variety of reforms, including making misclassification illegal, authorizing action by licensing boards, and requiring notice to workers of their status and their rights. One common feature among all the bills is the desire for the Department of Labor to play a role in the investigation and enforcement of worker misclassification. Should that happen, the number of officially reported fatalities will doubtless rise. And at the same time, those workers will be covered by both worker’s compensation insurance and North Carolina’s Occupational Safety and Health Act, which states that “each employer shall furnish to each of his employees conditions of employment and a place of employment free from recognized hazards that are causing or are likely to cause death or serious injury or serious physical harm to his employees.”


Workers carrying banana peppers at Kenda Farms 2003 (PBP)Our friends at Student Action with Farmworkers are very busy this week, sponsoring and promoting events for Farmworker Awareness Week. The schedule of events, posted here, shows the range of issues important to the people who harvest our food. Films highlighting farmworkers’ stories and dreams for the future show the rich heritage and cultural contributions brought to North Carolina by farmworkers who have traveled from near and far. Through discussions of immigration policy we learn why broad and inclusive immigration reform is critical to providing farmworkers with a voice in the workplace and a path to permanency. The Association of Farmworker Opportunity Programs‘ long sleeve shirt drive is a stark reminder of the dangers of pesticide exposure in the fields. A presentation on current laws impacting farmworkers exposes the doctrine of agricultural exceptionalism, which affects farmworker eligibility for everything from worker’s compensation benefits to collective bargaining. Check out one of the great opportunities for a chance to learn more about the more than 130,000 farmworkers and their family members in North Carolina!