Whether a worker is classified as an “employee” or “independent contractor” may seem like an inconsequential legal distinction, but a worker’s classification has the power to change the trajectory of their life. The story of one Minnesota construction worker, José Alfredo Gómez, who fell two stories while working on a house in 2022, illustrates the importance of worker classifications. Gómez’s injuries were severe, including “two fractured elbows, a broken hip, a large laceration on his forehead, and head trauma.” His injuries required him to be airlifted to the hospital against his employer’s wishes, who instead wanted to transport Gómez in a work truck. The employer assured Gómez “there was no need to contact lawyers” and offered him $200 per week, which he initially accepted. Gómez ultimately decided toreach out to Centro de Trabajadores Unidos en la Lucha (CTUL), a workers’ organization that connected him with a lawyer, because he was struggling to pay his steep medical bills. Gómez’s lawyer informed him that he was not covered by his employer’s workers’ compensation insurance policy since he was not classified as an employee. After being contacted by Gómez’s lawyer, the employer conceded that Gómez was incorrectly classified. As a result, Gómez was eligible for workers’ compensation benefits. While the physical suffering and financial strain of his injuries profoundly impacted Gómez and his family, the Gómezes were able to avoid imminent bankruptcy due to Gómez’s receipt of workers’ compensation benefits. Unfortunately, unlike Gómez, many workers are never connected to legal resources and may never discover the rights and benefits they are entitled to as employees when they have been misclassified as independent contractors. Further, some workers do not claim these rights even if they are aware of them because they fear retaliation based on immigration status.
Minnesota, along with many other states, has struggled to address widespread worker misclassification. Employers typically misclassify employees to avoid paying taxes and benefits associated with hiring a worker as an employee or, in some cases, to avoid knowledge of an employee’s immigration status. Misclassification is often intentional, but some employers—especially smaller ones—may be unaware that they are misclassifying workers, both because misclassification is normalized and because worker classification laws can be complex to the point of being indecipherable. Misclassification is especially common in the construction and agricultural fields. The misclassification of a worker can lead to lost wages, an unsafe work environment, and the worker’s unawareness of their employment status and how that status impacts their labor rights. States have enacted various statutes and enforcement mechanisms to deter misclassification, with varying degrees of success and impact on undocumented workers.
Some workers prefer to be misclassified because it may result in them receiving a higher initial take-home pay than if they were properly classified. Employers sometimes offer increased hourly rates for workers who accept independent contractor status. These workers’ initial take-home pay increases alongside their future tax liability and the employer’s decreased tax and insurance liabilities lead to “net savings” for the employer. Workers may not understand the risks they take on—like uncompensated work-related injuries and the lack of unemployment insurance or labor law protections—when they opt for contractor status. This Note will discuss the implications of misclassification for workers who are unknowingly misclassified as well as those who are willingly misclassified because of the “choice” that being undocumented can present—work as a contractor, or don’t work at all.
In 2023, Minnesota passed the Construction Worker Wage Protection Act (CWWPA) which supplements several existing misclassification statutes and attempts to address some of the wage theft issues specific to construction subcontracting. This Note analyzes the potential effectiveness of the CWWPA and other related statutes, identifies loopholes in statutory and administrative processes, and proposes solutions to strengthen worker protections, including extending those protections to undocumented workers.
This Note will also explore a fundamental tension between employment and immigration laws in the United States. Generally, workers benefit from being classified as employees, and proper classification of workers is a focus of labor rights advocates because it counteracts employer abuse of workers. While this may be true for workers without complicated immigration statuses, undocumented workers face additional considerations. Many undocumented workers lack a pathway to employee status due to their immigration status. Misclassification exposes undocumented workers to increased risk of injury at work, wage theft, and abuse on the job, but reduces the risk of certain immigration consequences, like deportation or inability to lawfully continue working.