For years now, many companies have been illegally misclassifying workers in order to pay them less. A nationwide trend toward higher minimum wages will accelerate this practice — unless legislators take a simple step to stop it.
This op-ed by TELG principal & general counsel Nicholas Woodfield was published by The Baltimore Sun on July 7, 2014. The full article is available at The Baltimore Sun.
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Government leaders at all levels — including President Barack Obama — are pushing to raise the floor on pay, and pundits are lining up on both sides: Will higher minimum wages put more money in workers' pockets? Or will they spark layoffs, as companies get by with fewer employees?
Actually, the most likely outcome is neither. Without extra safeguards, wage hikes will mainly give employers a huge new incentive to break the law by "misclassifying" more workers in order to stay competitive. Misclassification is already rampant among employers. It's illegal, and it cheats both employees and taxpayers, but it's also easy to implement and tough — too tough — for workers to fight.
