President Barack Obamas fiscal 2015 budget proposal includes nearly $14 million for the Department of Labor to combat the misclassification of workers as independent contractors, which renders them ineligible for certain benefits and protections under the law.
The budget proposal, released Tuesday, includes $10 million for grants to states to identify misclassification of workers and recover unpaid taxes, as well as $4 million for personnel in the DOLs wage and hour division to investigate misclassification.
When employees are misclassified as independent contractors, they are deprived of the benefits and protections to which they are legally entitled, such as minimum wage, overtime, unemployment insurance and anti-discrimination protections, the budget proposal reads.
Misclassification also unfairly disadvantages businesses that comply with the law and costs the taxpayers money in lost funds for the United States Treasury, and in Social Security, Medicare, the Unemployment Trust Fund and state programs, it adds.
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