Senate Bill Would Crack Down on Employee Misclassification

Senate Bill Would Crack Down on Employee Misclassification Senators Barack Obama (D-IL), Dick Durbin (D-IL), Ted Kennedy (D-MA), and Patty Murray (D-WA) have introduced S. 2044, the Independent Contractor Proper Classification Act of 2007, which seeks to close a perceived loophole that allows businesses to classify workers as independent contractors. The senators believe that current law allows companies to avoid paying payroll taxes and benefits for employees. Their bill would restrict the ability of businesses to justify worker misclassifications under Section 530 of the Revenue Act of 1978. The legislation would also require the Department of Labor to enforce the new law. Recent high profile court cases involving FedEx (and other large companies that classify many individuals who appear to be employees as independent contractors) have brought this issue to light.