On May 21, 2008, Rep. Andrews (D-NJ) introduced the Employee Misclassification Prevention Act (H.R.6111), which would amend the Fair Labor Standards Act (FLSA) to penalize employers who misclassify workers as independent contractors. 

The legislation would impose a maximum fine of $10,000 per violation for an employer who “repeatedly or willfully” failed to accurately classify a worker. Furthermore, where an employer’s misclassification accompanied violations under the FLSA’s maximum hours or minimum wage requirements, a worker could recover double his or her liquidated damages.

Under the legislation, employers would be required to keep records of workers’ employment or independent contractor classification. The bill would also require employers of individuals classified as “non-employees” to notify them in writing of (1) their classification, (2) that their rights to “wage, hour, and other labor protections” depend upon proper classification, and (3) directing them to the Department of Labor if they suspect they have been misclassified or need further information.

The Employee Misclassification Prevention Act would also strengthen classification monitoring by requiring state unemployment insurance agencies to conduct audits and establish penalties for employers who misclassify employees, or fail to properly report or record their compensation for unemployment compensation purposes. Meanwhile, the Secretary of Labor would be directed to ensure that at least 25 percent of the Wage and Hour Division’s audits are focused on potential misclassifications, with an auditing focus on employers in those industries that most frequently misclassify employees as non-employees.

Several unions and employee rights groups have endorsed the legislation, which has 23 cosponsors and has been referred to the House Committee on Education and Labor and the House Ways and Means Committee.