Iowa Governor Creates Task Force on Employee Misclassification

Iowa Governor Creates Task Force on Employee Misclassification

This topic sounds boring, but it is an attempt to address real mistreatment and neglect of employees by some unscrupulous Iowa employers that results in thousands of injured workers being stuck without health care or income when injured at work.

On July 16, 2008, Governor Chet Culver signed Executive Order Number Eight to address the injustice and to level the playing field for honest employers. Some employers all over the United States play the same game, calling employees "independent contractors," to avoid paying workers' compensation premiums, unemployment insurance, Social Security taxes and withholding State and Federal taxes.

The move was hailed by a number of Iowa trade organizations that said that the scofflaws had a competitive advantage over those who treat their employees legally. Many employers think that they can decide what the employment relationship is with their workers, but they are probably ignorant of section 85.54 of the Iowa Code. Section 85.54 outlaws any employer's attempt to avoid the impact of the Iowa Workers' Compensation Act on employers and on injured workers. Employers have been known to pretend that all types of employees are independent contractors, from truck drivers to secretaries.

Case law clearly sets out criteria for what positions are truly independent contractors, such as whether the "contractor" can send someone else in his or her place to do the work, who controls the hours of work, who controls how the work is done, who provides the equipment and supplies, and whether the pay is hourly or by the job.

Governor Culver appointed a task force, including delegates from the Department of Labor, Revenue, Economic Development, Workforce Development and the Governor's Office, to review the law, regulations and current enforcement practices, to see what changes can be made to more effectively enforce the existing legal protections. The task force is to report back to the Governor by December 17, 2008.