BOSTON – Massachusetts Attorney General Maura Healey today, April 30, led a coalition of 12 state attorneys general in filing a brief to the National Labor Relations Board in support of a decision that misclassification of employees as independent contractors constitutes an unfair labor practice in violation of the National Labor Relations Act.
In the case Velox Express Inc. vs. Jeannie Edge, an Administrative Law Judge determined that Velox Express, an Indiana-based company that performs medical specimen pick-ups, retail deliveries, home infusions and long-term care pharmacy work, intentionally misclassified its drivers as independent contractors and restrained them from exercising their right to unionize.
“Employers that misclassify their employees cheat local and state governments from collecting millions in taxes each year and create an unfair playing field for others,” said Healey, in a press release. “I urge the National Labor Relations Board to uphold the decision in this case.”
According to the brief, misclassification is an increasingly common way for employers to avoid their legal obligations to employees and to unfairly compete in the marketplace.
When employers misclassify their workers as independent contractors, it is significantly harder for those employees to assert their workplace rights, including protections from wage theft, harassment and discrimination.
Misclassified workers are also denied Occupational Health and Safety Act protections, and are unable to form unions, collectively bargain for wages and benefits, or join in concerted efforts to improve conditions in their workplace without fear of reprisal from employers.
Employers that misclassify their workers are also able to avoid paying unemployment insurance and contributing to the worker’s compensation system, which poses significant cost in terms of lost revenue for state, local, and federal government.
According to two studies cited in the brief, Massachusetts loses an estimated $259 million to $278 million annually, $87 million of which is in unpaid unemployment insurance taxes, because of misclassification.
In 2015, the Massachusetts Council on the Underground Economy reported recoveries of more than $50 million from employers who misclassified their employees from 2013 to 2015.
Workers who believe that their rights have been violated in their workplace are encouraged to file a complaint at www.mass.gov/ago/fairlabor.
The coalition of state attorneys general submitted today’s brief at the invitation of the National Labor Relations Board. Massachusetts and Pennsylvania led today’s brief, joined by Connecticut, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Virginia and Washington.
This matter was handled by Division Chief Cyndi Mark and Assistant Attorney General Kate Watkins of Healey’s Fair Labor Division.