Is your waiter a contract worker?

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By Dan Chapman
Jan. 19, 2014

Last month, the U.S. Department of Labor sued a Chinese restaurant in Jonesboro seeking to recoup $2 million in back wages allegedly owed 84 waiters and kitchen staff.

The lawsuit says Shu Wang, the owner of the Hibachi Grill and Supreme Buffet, didn’t pay minimum wage or sufficient overtime to his mostly Chinese and Mexican employees.

Shu paid the workers as if they were independent contractors, not full-time employees. The distinction is critical: Employees are guaranteed a minimum wage, overtime and other workplace benefits. Contractors are not.

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The labor department estimates that up to 30 percent of employers misclassify workers, a lingering effect of the Great Recession and its economic funk.

Workers wrongfully pegged as independent contractors lose more than wages. They can miss out on unemployment insurance, health and pension benefits and family leave.

State and federal tax coffers also suffer. Misclassification cost the federal treasury $2.7 billion in unpaid taxes, according to a Government Accountability Office report issued in 2006, the latest federal study.

More than ever, squeezed employers are classifying workers as independent contractors, particularly in the construction, home care, trucking and janitorial industries. That shift, coupled with a trend toward more workers holding multiple temporary and outsourced jobs, has convinced some labor experts that misclassifying employees will become more common.

Legislators, in Washington and in numerous state capitols, are cracking down on the practice. State Sen. Steve Henson, a DeKalb Democrat, will co-sponsor a bill aimed at scofflaw employers.

“It’s so unfair to employers who are doing the right thing and paying the (right) wages and unemployment benefits, but are competing against people who are violating the law,” said Henson, the Senate minority leader.
Shu Wang, the grill’s owne

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John Jackson, a trucker running containers from the port of Savannah to nearby warehouses, spoke last month with a labor department investigator. Jackson’s company considers him an independent contractor, despite 50-hour work weeks without overtime or benefits.

Jackson, 56, makes $50 a haul, barely enough to get by and cover diesel and repairs for his 2004 Freightliner.

“I’m living paycheck to paycheck, and I should be doing better than that,” he said. “It’s just getting harder and harder to make a living driving a truck.”

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