To cut costs, some employers cheat the system by misclassifying their employees as independent contractors. Though the vast majority of employers are honest, the ones that aren't deny their employees vital worker safeguards and avoid paying their fair share of Social Security, unemployment insurance, and income tax.
This practice, which occurs across several industries including construction, trucking, landscaping, and home health care, cheats workers out of the benefits they deserve and places honest employers at a competitive disadvantage. It also robs taxpayers of funds that would otherwise go towards public services. A 2009 study found that Ohio alone loses and estimated $890 million a year from worker misclassification. Ohioans don't deserve to lose out because of some employers' dishonest business practices.
My legislation, the Fair Playing Field Act would stop the misclassification of employees, ensuring workers are protected and employers are paying the taxes they owe. The bill allows the IRS to order employers to properly classify their workers; requires clarification of the rules for verifying employment status, making it easier to determine for both employers and workers; and penalizes employers who don't follow the rules. At the same time it preserves current law for professional services that have always treated their employees as independent contractors.
Cracking down on misclassification raises revenue that we can use to fund job-creating future transportation projects like repairing the more than 2,200 bridges in Ohio deemed "structurally deficient." The Highway Trust Fund, the main source of funding for critical infrastructure projects is running low. The fund expires on September 20 but it's possible that the Department of Transportation could begin delaying payments as early as July 18. The Fair Playing Field Act would raise $5.7 billion over the next ten years, enough to help pay for a short-term highway bill to prevent insolvency while Congress works towards passing a long-term bipartisan transportation bill.
Preventing worker misclassification through the Fair Playing Field Act will protect Ohio's workers, strengthen our economy, and provide a much-needed solution to keeping our infrastructure reliable.