BATON ROUGE – Business groups have urged a state task force studying the problem of employee misclassifications not to saddle businesses with onerous new regulations.
Dawn Starns McVea, a member of the Misclassification of Employees Task Force and the National Federation of Independent Business’ state director, criticized the notion that some small businesses are intentionally failing to classify workers as employees in order to avoid payroll taxes.
“NFIB has been opposed to proposed new and onerous regulations and hefty fines on unsuspecting small business owners,” McVea said in a prepared statement.
The task force has its roots in a special session of the legislature last year when lawmakers passed a resolution requiring the state Department of Revenue to create a panel that would recommend changes to state laws to eliminate employee misclassification.
“The legislation hereby finds that the misclassification of employees is a serious problem in Louisiana that substantially reduces revenues otherwise due to state and local government,” the resolution states. “... The misclassification of employees denies misclassified employees important protections and benefits such as minimum wage, sick leave and unemployment benefits as well as reduced access to workers’ compensation.”
Such classifications have become contentious issues in other states where gig economy companies often favor keeping their workers classified as independent contractors rather than employees.
“I … remain hopeful that they will not propose fines,” McVea told the Louisiana Record in an email. “That is not something we would support.”
The Louisiana NFIB has not received a lot of complaints from federation members about being hit with civil lawsuits over misclassification issues, she said.
“However, they certainly fear them,” McVea said. “Our members tell us they most often misclassify due to uncertainty about whether an employee fits the definition or not.”
Rather than issuing fines and punishments to first offenders, the task force should focus on increasing public awareness and education to improve compliance with employee classification rules, she said.
“What we hope to see is that the task force comes to some agreement on new definitions for businesses and employees that are easy to understand and follow,” McVea said. “We hope to see some movement on definitions and awareness before imposing fines and penalties.”
The task force’s report to the state legislature had an initial due date of March 1, but the panel has sought a one-month extension.