DOL Recovers OT Pay for NC Workers Misclassified as Independent Contractors

More than 180 workers at a North Carolina company will receive about $1,000 each in overtime pay after the U.S. Department of Labor found that the workers had been misclassified as independent contractors.

“Employers who improperly misclassify employees as independent contractors strip these workers of their overtime and minimum wage and unpaid leave protections, shortchanges their Social Security benefits and prevents collection of payroll taxes owed to local, state and federal levels,” said the Labor Department’s Wage and Hour Division District director, Richard Blaylock.

The department said in a bulletin that investigators found that Charlotte-based IPD Co., which installs industrial rack systems across the U.S. and Canada, had improperly classed the workers and did not pay time-and-a-half for more than 40 hours worked in a week.

The debate about when workers can be considered independent contractors has simmered for years across the country, as classification can affect wages, taxes and workers’ compensation insurance. The DOL has proposed changes to the previous administration’s guidelines, making it more difficult to call some employees contractors.

“Misclassification is a serious concern and remains a Wage and Hour Division priority. Employers must understand their obligations and make sure their pay practices comply with federal law or risk costly consequences.”

IPD is also known as Industrial Precision Design Inc.

Topics Contractors North Carolina