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California newspaper loses $10 million because of misclassified workers

Posted on January 29th, 2014 Read time: 1 minutes

In another example of the dangers of misclassification, a California judge ruled last month that the San Diego Union Tribune misclassified its carriers as independent contractors, and issued a judgment of nearly $10 million, according to Staffing Industry.

The newspaper carriers filed a class action lawsuit against the Union Tribune in the beginning of 2009, claiming that they were really employees and not contractors, and therefore they were entitled to reimbursement and other expenses. They were awarded the money because the judge ruled that the carriers did not have sufficient control to be called private contractors.

Had the carriers been hired through an employer of record, the newspaper would not have opened itself to a lawsuit. An article by Forbes relates that the Department of Labor (DOL) and New York State investigators had begun cracking down on misclassified employees.  The DOL claims to have collected over $18.2 million in back wages for more than 19,000 workers who had been misclassified as independent contractors.

One way to avoid the confusion about contractors and employees is to use an employer of record. Such a company will manage your employees for you, and handle all HR back office work.

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