“One of the most significant contributing causes of the widening inequality and insecurity in the American workforce is the accelerating shift to what economists call contingent employment. That means any form of employment that is not a standard payroll job with a regular paycheck. It can take the form of temps, contract workers, part time jobs, or jobs with irregular hours. A study by the GAO found that fully one-third of the US workforce, or 42.6 million workers, was contingent, meaning in a work arrangement that is “not long-term, year-round, full-time employment with a single employer.
“At the heart of contingent work is the misclassification of regular workers as independent contractors, a practices that deprives workers of income, benefits such as workers’ compensation and rights to form bargaining units — and deprives government of tax revenues.
“Some of the employers who misclassify their employees as contractors do so in error, which is perhaps not surprising, given the vagueness of the statutes defining employment and the complexity of the case law. However, in Senate testimony in 2010, Deputy Secretary of Labor Seth Harris charged that “much worker misclassification is intentional.” Employers do this, he continued, in order to reduce labor costs (by about 30 percent), in part by not making required contributions to unemployment insurance and worker compensation funds. By doing so, lawbreakers gain an unfair competitive advantage over honest employers.”
Read the full article here.