WASHINGTON, Dec. 13 (UPI) -- An increasing number of U.S. employers are facing charges of paying workers as independent contractors rather than as employees, the Labor Department said.
In fiscal 2009, the Labor Department ordered employers to pay $2.6 billion in back wages to 2,190 workers they had mislabeled as independent contractors. In fiscal 2010, the amount jumped to $6.5 billion paid to 5,261 employees, USA Today reported Monday.
The Labor Department said the federal government lost out on $3.4 billion in tax revenue due to the practice of mislabeling employees.
The dividing line, the newspaper said, is defined by who has control of the job description.
California truck driver Will Cantrell said his contract bars him from working for other companies and his schedule and the loads he hauls are dictated by the contract. "I come in when they say, I do loads when they make the schedule," he told the newspaper.
He receives no health benefits and pays the expenses on the truck he drives, including fuel costs.
Employers can use the contractor label to dodge paying benefits, pay less than standard wages and avoid payroll taxes.
Garry Mathiason, vice chairman of Littler Mendelson, a law firm that specializes in labor issues, said class-action lawsuits filed by workers that employers label as independent contractors had risen 50 percent to about 300 this year.