The Problem we are Solving

Employee Misclassification

The US and many state and local governments have abdicated their responsibility to ensure that workers are properly classified as W2 employees. They are no longer enforcing the laws that are still on the books in this area. We intend to promote this issue to encourage enforcement or to encourage companies to stop this practice through shining a public light on what they are doing, or taking legal action. Many companies are using third party staffing companies to try to get the benefits of having 1099 employees while (seemingly) pushing the liability onto the staffing providers. The reason companies do this is the following:

• They are able to stop withholding taxes which lulls their employees into thinking they are being paid more when they are not.• They are able to stop paying workers compensation insurance and avoid liability for workers who are injured.• They are able to stop paying for unemployment insurance and avoid liability for their actions.• They are able to avoid federal, state, and local labor laws by claiming their workers are not employees.• They are able to hire illegal immigrants and claim they were unaware as they say they are not required to verify work authorization which allows them to access a much cheaper workforce.

While there are some definite benefits to employers in misclassifying employees- it is still illegal and causes real harm. Wages go down for hourly employees due to competition with illegal immigrant labor, workers lose employee protections, and the government loses revenue which  it is due. Additionally, any company that does not misclassify their employees is put at a competitive disadvantage for following the law.