Transportation 6

The Senate Health, Education, Labor, and Pensions hearing committee stressed the importance of state efforts to combat employment misclassification of independent contractors in a hearing on the proposed Employee Misclassification Prevention Act last week.  Senators Sherrod Brown (D-Ohio) along with Sens. Tom Harkin (D-Iowa), Dick Durbin (D-Ill.), Patty Murray (D-Wash.), Bob Casey (D-Pa.), Jeff Merkley (D-Ore.), Barbara Mikulski (D-Md.) and Al Franken (D-Minn) proposed the legislation that would create a duty on employers to set up additional record keeping requirements if using independent contractors.  Penalties would also increase for employers found to have misclassified employees as independent contractors.

According to some individuals who testified at the hearing, the proposed legislation may stop employers from using independent contractors, the majority of whom operate legitimate businesses, because the recordkeeping costs and concern over potential penalties are too high.  The attack on the independent contractor business model that has long been an important component of every segment of the transportation industry is not new, and this proposed legislation is another reason to assess your company's independent contractor model now to spot particular problem areas and correct them.