Evans right, many workers classified incorrectly


With health care policy in limbo in Washington, the politicians who would like to be Georgia’s next governor are staking out their own policy outlines. Democratic State Rep. Stacey Evans favors expanding Medicaid, but said the state could take other action as well.

We decided to check Evans’ number of misclassified workers, and found she’s on safe ground.

Some businesses avoid treating workers as employees by calling them independent contractors. The person might work only for that one business, use equipment the business provides and do exactly what the business tells him or her to do, and yet be labeled as if the person was in business for himself.

The advantage for companies is they avoid paying a number of employment taxes, including Medicare, Social Security and unemployment insurance. If they offer health insurance, they would sidestep that too.

Georgia’s Department of Labor says, “Independent contractor status depends on the underlying nature of the work relationship.”

In a recent case, a state administrative judge ruled that a man who drove for a Georgia limousine service was actually an employee and not an independent contractor, as the company (and the state Department of Labor) claimed. The company had required the man to set up his own limited liability corporation, but the ruling said that made no difference.

The driver used a company car, and he was “given direction as to where to drive, when to drive, how to drive, how often to drive, and the rates to charge customers.”

The judge called this an “extreme” case of misclassification.

Evans’ campaign communications director Seth Clark said she relied on a 2015 Georgia Senate study for the number of misclassified workers.

That report said an accurate estimate was difficult because the state had never done a complete study, as other states have. However, the state Department of Labor reported its inspectors had found “over 4,000 misclassified employees,” across about 1,700 businesses in 2014.

In 2015, it found about 1,500 misclassified workers at 1,800 firms, and in 2016, the number was about 3,000 out of 2,400 firms audited.

Complaints by workers and random selection by inspectors trigger audits. The data show that most audits lead to the discovery of a misclassified worker.

The department told us that currently, it lists nearly 235,000 employers. The review of about 2,400 represents a small fraction, about 1 percent. The Senate report said the department lacked the resources and manpower to “effectively audit and investigate potential violators.”

At the national level, the most recent numbers come from the Government Accountability Office. Its review of IRS data from 2008-10 found that worker classification problems represented 20 percent, or over 3 million cases, of noncompliance issues.

It’s important to note that simply being classified as an employee is no guarantee of health coverage. Companies with fewer than 51 employees face no penalty if they fail to offer insurance under the Affordable Care Act.

Our ruling

A state Senate study said there is no solid estimate of the number of misclassified workers, but state investigators had found between 1,500 and 4,000 instances in each of the past three years, or an average of 2,800 per year. That is based on a review of about 1 percent of businesses, and most reviews reveal a misclassified worker. States that have conducted more systematic studies found misclassification rates in the range of 10 to 20 percent.

The 2,800 average likely misses many instances, and it’s a relatively small number, but it’s enough to support Evans’ statement.

The connection to health care is less clear, because many small employers don’t offer health insurance, nor are they required to. But Evans was careful to include health care as one of several benefits, and her claim doesn’t hinge on that element.

With that caveat, we rate this claim Mostly True.


Reader Comments ...

Next Up in Georgia Politics

Last WWII veteran in Georgia Legislature, John Yates, dies
Last WWII veteran in Georgia Legislature, John Yates, dies

John Yates, the last World War II veteran to serve in the Georgia General Assembly, has died. He was 96. Yates became one of a small number of Republicans in the Georgia House at the time he was first elected in 1988. After losing re-election, he ran again in 1992 and remained in office until 2016 representing a district based in Griffin. Yates...
8 candidates file to run for vacant Ga. House and Senate seats
8 candidates file to run for vacant Ga. House and Senate seats

Four candidates are running in each of the two special elections Jan. 9 to fill vacancies in the Georgia Senate and House of Representatives. The elections are being held to fill the seats of former Sen. Rick Jeffares and former Rep. Brian Strickland. Jeffares, R-McDonough, resigned to run for lieutenant governor, and Strickland, R-McDonough,...
Poll shows Georgia Republicans support medical marijuana cultivation
Poll shows Georgia Republicans support medical marijuana cultivation

In-state harvesting of medical marijuana enjoys solid support among Georgia Republican voters, according to a poll released Monday by Rep. Allen Peake, the state Legislature’s strongest backer of medical marijuana. The telephone poll of 511 likely Republican primary voters by the Tarrance Group found 71 percent were in favor of Georgia...
The left continues to question who could support Roy Moore in Tuesday’s election
The left continues to question who could support Roy Moore in Tuesday’s election

A day before the Alabama Senate election, the left wonders why people in Alabama think Roy Moore is the right  person for the job. A roundup of editorials Monday takes a look at the issue. From CNN: The one person people in Alabama would likely listen to about Moore has remained quiet. From USA Today: Has Jones waited too late to try to fire...
Here’s why the right should embrace Robert Mueller’s investigation
Here’s why the right should embrace Robert Mueller’s investigation

As Mueller’s investigation heats up, the right would do well to support the special counsel’s work. A roundup of editorials Monday takes a look at the issue. From The Wall Street Journal: A president can obstruct justice, but this one hasn’t as far was what we’ve seen. From the National Review: Why doesn’t Trump just order...
More Stories