Beck praises decision to study worker misclassification
State Rep. Lisa Beck (D-Lakes of the Four Seasons) today said that a legislative study of worker misclassification across Indiana is long overdue. Beck wants to take an active part in that study this summer.
The Legislative Council – made up of Indiana House and Senate leadership – agreed earlier this week that the Interim Study Committee on Employment and Labor should examine worker misclassification, which happens when employees are classified as independent contractors or self-employed, a practice that often results in the worker being denied such things as overtime pay, worker’s compensation in the event of injury, and unemployment insurance.
“This is little more than payroll tax fraud committed by unscrupulous contractors who are trying to gain an unfair competitive advantage in the marketplace,” Beck said. “Payroll fraud affects every taxpayer, shrinking public budgets, and even health care costs. It is about regaining lost tax revenue and insurance fund premiums because of dishonest contractors.”
Worker misclassification has been a problem in Indiana for many years. A study commissioned in 2010 by the Indiana Building and Trades and Construction Council estimated that Indiana could be losing as much as $400 million a year due to misclassification. Earlier this year, an Indianapolis company was ordered to pay more than $82,000 in wages owed to misclassified workers.
“There are at least four state agencies in state government – the Indiana Department of Revenue, the Indiana Department of Labor, the Worker’s Compensation Board of Indiana, and the Department of Workforce Development – that have the ability to investigate and report on this subject matter,” Beck said. “What this study would do is direct these agencies to tell us how pervasive worker misclassification is in Indiana, and what we can do to combat it.”
As the ranking Democrat on the House Employment, Labor and Pensions Committee, Beck said she’s had the chance to talk to workers and contractors from across the state about the issue, and found there is ample evidence to demonstrate that worker misclassification needs to be investigated and stopped.
“Worker misclassification cheats everyone, except for the people who participate in it, and profit from it,” Beck said. “It deprives the workers of fairly earned benefits, it cheats honest businesses, and local and state budgets. This is exactly the kind of issue that we must study. I look forward to taking an active role in doing what we can to put an end to worker misclassification.”