ATLANTA -- An untold number of Georgians are working when and where their bosses say, but instead of getting the benefits of employees, they are classified as contractors.
Some say that hurts the employee, the government and law-abiding companies. Now, the state Legislature is starting to listen.
State Rep. Ronnie Mabra, D-Fayetteville, is an attorney who said his law firm hires employees but also works with contractors. He told a House of Representatives panel that he respects the difference, but other employers are known to cheat and put workers in the wrong category.
“We have the issue where employers are misclassifying employees and independent contractors,” Mabra said Tuesday.
What that means is some employers set tight rules on the people who work for them but cut their own payroll tax bills by hiring the workers as contractors instead of as employees.
Misclassification is “pretty widespread,” said Ted Terry, state campaign director at the Georgia AFL-CIO. Some cable installers, construction workers, stagehands and even security guards at strip clubs are frequently used as employees but classified as contractors, Terry said.
“If you’re an employee, you have certain rights and privileges that are assigned to you versus an independent contractor,” such as workers’ compensation insurance, guaranteed overtime pay and sometimes health insurance and a retirement plan, Mabra said.
Contractors do not necessarily get those things, though they are supposed to get things employees don’t, such as control of their own schedules.
At the Port of Savannah, some misclassified truckers are not making minimum wage or receiving overtime, said Eric Robertson, political director of the Teamsters union Local 728 in Atlanta. Equipment isn’t free, either.
“It creates unsafe situations where they’re forced to transport with faulty equipment, they’re forced to maintain their own equipment even though the employer is ... dictating every part of their working day,” and some are forced to buy insurance from the company, he said.
Law-abiding companies, said Robertson, pay for things like taxes and equipment that law-breaking companies pass on to their workers.
“Employee misclassification has a hugely detrimental effect on the employers that we are in dealings with, such as UPS and the other larger freight companies,” Robertson said.
After a short hearing Tuesday, a subcommittee of the House Insurance and Labor Committee unanimously passed Mabra’s bipartisan House Bill 500 to start to do something about the problem. The bill would strengthen two existing practices by writing them into law.
First, it directs the state Department of Labor to set up a website where workers can complain of misclassification. It also directs the department to investigate credible allegations.
Second, it lists the differences between an employer and a contractor, in language taken from a Georgia Supreme Court case.
Contractors are workers who are allowed to work for multiple clients at once, can reject work assignments without consequence, set their own schedule and have minimum oversight, among other things. Everyone else is an “employee.”
Having that list in state code will be a “tool” the Department of Labor can use when it investigates complaints, said state Rep. Mark Hamilton, R-Cumming.
The bill now moves to the full Insurance and Labor Committee.