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Yo_Mama_Been_Loggin

(118,681 posts)
Wed Jan 22, 2025, 08:18 PM Jan 22

Misclassifying workers as independent contractors is costly for workers and states

Executive summary

Workers misclassified as independent contractors lose out on critical protections, benefits, and labor rights including minimum wage, overtime pay, unemployment insurance, the right to form a union, and anti-discrimination protections in most states. Additionally, these workers bear the full financial costs of Social Security and Medicare contributions.

This analysis estimates the cost of independent contractor status for 11 commonly misclassified jobs. For example, a typical construction worker, as an independent contractor, would lose as much as $19,526 per year in income and job benefits compared with what they would have earned as an employee. A typical truck driver, as an independent contractor, would lose as much as $21,532 per year in income and job benefits compared with what they would have earned as an employee.

Lost compensation due to misclassification also varies by state. Estimated annual per-worker costs in lost compensation are as high as $26,253 for truck drivers in New Jersey.

Home health care aides, janitors, and landscapers are some of the occupations most affected by misclassification, as well as being relatively low-paying jobs. Misclassification further threatens the economic security of these workers leaving them vulnerable to exploitation and harmful labor practices.

https://www.epi.org/publication/misclassifying-workers-2025-update/

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