US States News, September 7, 2007, Friday
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All Rights Reserved
September 7, 2007 Friday 3:07 AM EST
BYLINE: US States News
DATELINE: ALBANY, N.Y.
BODY:
Gov. Eliot Spitzer, D-N.Y., has issued the following news release:
Governor Eliot Spitzer today held a press conference with Department of Labor Commissioner Patricia Smith and labor leaders to announce a new Executive Order that creates a Joint Enforcement Task Force to address the problem of employee misclassification. The misclassification of workers occurs when an employer improperly labels an individual as an independent contractor rather than an employee, or pay workers off the books.
Misclassified employees can be deprived of numerous protections to which they are legally entitled. Businesses can use misclassification to avoid complying with laws governing unemployment insurance, workers' compensation, social security, tax withholding, temporary disability insurance, minimum wage and overtime. Misclassification also puts law-abiding businesses at a competitive disadvantage, since they must bear the expense of providing these benefits, while those who skirt the law bear no such costs.
Effective immediately, the Executive Order will allow for greater coordination among state agencies charged with classification enforcement and create a new Joint Enforcement Task Force led by the Department of Labor. The Task Force will work to strengthen enforcement and avoid duplication of efforts by sharing relevant information, coordinating investigations and enforcement actions, and educating the business community and the public at large. The Task Force will be required to issue a report to the Governor on February 1 of each year, detailing its actions, and suggesting potential legislative or regulatory changes in this area.
"For too long State government has turned a blind eye on a growing epidemic that is keeping wages and benefits artificially low for working New Yorkers," said Governor Spitzer. "This Executive Order - a key component of my economic security agenda - protects worker rights while leveling the playing field for law abiding employers so they are not at a competitive disadvantage to employers who refuse to play by the rules as they exploit hard working New Yorkers."
Department of Labor Commissioner Patricia Smith said: "This Executive Order is another powerful and unprecedented tool for protecting the basic rights of all of the state's workers. The Joint Enforcement Task Force is assembled and ready to reverse several years of lax enforcement."
New York State AFL-CIO President Denis Hughes said: "We applaud the Governor for his leadership on this most important issue. Today's Executive Order will go a long way toward eliminating the opportunity for unscrupulous employers to deny working men and women their statutory rights to fair pay, benefits and protections under state law. As a result, it provides legitimate, well-meaning employers with the opportunity to compete on a level playing field. This Executive Order will help to ensure that working men and women are afforded the rights, benefits and dignity their work so justly deserves."
Change to Win Executive Director, Greg Tarpinian, said: "Misclassification of workers is theft. Outlaw employers steal compensation from workers, security from their families and taxes from their communities. Law-abiding employers suffer unfair competition, and the economic standards that support the American dream for workers are threatened. All the Change to Win unions thank Governor Spitzer for his leadership in holding employers accountable."
New York City Central Labor Council President Gary La Barbera, said: "The misclassification of employees is not just a labor problem, it is an economic and human rights crisis. By misclassifying employees as independent contractors, unscrupulous employers avoid labor and employment laws, prevailing wage laws, and other legislation intended to ensure that workers are protected. The New York City labor movement applauds Governor Spitzer today for his steadfastness and commitment to protecting all workers from the exploitation of misclassification. The Central Labor Council is fully committed to embarking on an education campaign to let workers know their rights under the new classification enforcement measures and how to protect themselves."
A recent study conducted by the School of Industrial Labor Relations at Cornell University estimates that approximately 10 percent of workers reviewed from audits conducted by the Department of Labor were misclassified. In the construction industry, this number increased to 15 percent.
Members of the Task Force will include representatives from the Attorney General's Office, the Department of Taxation and Finance, the Workers' Compensation Board, the Workers' Compensation Inspector General and the New York City Comptroller's office. Each of these entities enforces different laws pertaining to misclassification of workers. Prior to the signing of this order, they did not coordinate their enforcement efforts on this issue.
The Governor first addressed this problem in a recent policy speech outlining his economic security agenda.
For more information, visit the Department of Labor's web site at www.labor.state.ny.us.
To view Executive Order, visit: http://www.ny.gov/governor/press/ExecutiveOrderNo17.pdf.
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