YEO Policy Books 2014 Policy Book | Page 20

Contractor Compliance: Penalties for Misclassification of Employees Issue: Defending Workers & Families Target Level of Office: Local Policy Origin: City of Omaha’s Human Rights and Resources Department, Nebraska Link: www.YEONetwork.org/2013policy/?i=199 Summary Narrative of the Policy: Under its contracting provisions, the City of Omaha outlines contract compliance enforced by the Human Rights and Resources Department. Specifically, the city requires all potential contractors to file, as part of bid documents, contract employment reports such as information on employment practices, policies, programs and statistics of the contractor. Specifically, contractors must abide by Nebraska’s Misclassification of Employees laws or Nebraska’s Fair Labor Standards laws, otherwise they are subject to fines and up to six months in jail. Relevant Talking Points & Important Information: • According to the U.S. Department of Labor, the misclassification of employees as something other than employees, such as independent contractors, presents a serious problem for affected employees, employers, and to the entire American economy. Misclassified employees are often denied access to critical benefits and protections to which they are entitled, such as family and medical leave, overtime, minimum wage, and unemployment insurance. • In addition to these workplace protection losses, misclassified employees also lose, the right to join a union, face an increased tax burden, often suffer from wage theft, and may have no recourse for workplace injury violations and disability-related disputes. • Misclassification is an increasing trend and often a cost-cutting measure taken on by the employer. It is, in fact, a tax dodge because it causes federal, state, and local governments to suffer revenue losses. Additionally, employers may misclassify workers as a way to circumvent workplace civil rights including prohibitions of employment discrimination based on age, race, gender, or disability. 20 Local Level Policy 2014 Book