Earlier this week, Department of Labor Secretary Hilda L. Solis announced an inter-agency coordinated effort targeting the illegal practice of employee misclassification. In the statement, the DOL announced an agreement with the IRS and state labor commissioners and agency leaders to:
"improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections.
The memorandums will enable the sharing of information and coordination of law enforcement in order to ensure that employees receive the protections to which they are entitled under federal and state law. According to DOL attorney Patricia Smith:
"There's more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased.
This is a big win for artists in the animation and visual effects industries. Its been noted numerous times how common the misclassification of employees has become as companies look to cut any corner in order to increase profit margins. Essentially, classifying an employee as a freelance contractor is wage theft, as they are not being paid due overtime (working for flat or weekly rates without hourly considerations).
Anyone who is under such an agreement should contact their local Department of Labor Wage and Hour Division Office, or call the toll-free help line at (866) 4-US-WAGE (866-487-9243). Now, with the sharing of information between state and federal agencies, penalties for this will be increased as multiple fines will be levied.
Of course, said artist is also free to sign a Representation Card, and encourage their peers to do likewise. With a majority interest, we can bring the offending company under a collectively bargained contract that stipulates adherence to labor laws as well as steps we can take to rectify any unfortunate transgressions.