Minnesota is forming a task force to investigate worker misclassification. Meanwhile, in Florida, the US Department of Labor has filed suit against a staffing firm in what could be the agency’s largest-ever independent contractor misclassification case.
Task force. Minnesota Attorney General Keith Ellison announced he is forming a new advisory task force to take a closer look at worker misclassification.
In a statement, Ellison said he created the task force to “gather the best thinking about the problem and make practical, workable recommendations to the legislature, state agencies, other levels of government, industry nonprofit organization and advocates about how we can put an end to the problem.” A request has gone out for those interested in serving on the task force. Plans call for the task force to issue a report next spring, but it will likely make initial policy recommendations in December.
“Misclassifying workers hurts not only those who are misclassified and their families,” Ellison said. “It hurts all Minnesotans, including businesses who do the right thing by their employees by playing by the rules and every Minnesota taxpayer who has to make up the slack for law-breaking employers.”
Misclassification suit. The US Department of Labor has filed suit against customer service provider Arise Virtual Solutions Inc. in what could be the largest independent contractor misclassification case in the agency’s history. The company disputes the allegations.
Filed in the Southern District of Florida in Fort Lauderdale, the suit alleges that the Miramar, Florida-based company — whose clients include Barnes & Noble, Comcast, Disney and Walgreens — misclassified over 22,000 workers.
An investigation found that Arise promised workers they would “be their own bosses” and could earn income providing customer support to Fortune 500 clients, according to the department. However, the workers had no real autonomy, were subject to a strict scheduling policy and had to buy their own equipment, it said.
The agency also said its investigation found the company:
- Expected workers to pay for mandatory training while attending courses offered through Arise’s proprietary software.
- Failed to pay workers for attendance at what often amounted to multiple weeks of required training.
- Required workers to create their own corporations or LLCs, or join existing business entities, to support Arise’s attempts to claim these workers were independent contractors.
- Required workers to sign an arbitration agreement waiving their ability to seek restitution for alleged Fair Labor Standards Act violations in court.
The DOL also said it received several complaints of wage violations from former workers at Arise, and the company is involved in litigation involving similar allegations brought by the District of Columbia.
In a statement to SIA, Arise disagreed with the department’s findings.
“At Arise, we believe that people should have flexibility and control over where, when, and how they work. We respectfully disagree with the Department of Labor’s lawsuit and believe it threatens the kind of flexible work that millions of Americans choose today,” the company told SIA. “We have and will continue to work with the Department of Labor to answer questions and illustrate how we are appropriately using the independent contractor relationship to protect this flexibility. We look forward to resolving this matter in a way that does not significantly impact the service partners and their agents and clients who use the Arise platform.”