Michigan Attorney General Dana Nessel says a new unit in her office will focus on businesses that illegally classify their workers as independent contractors to reduce their costs.
The Democratic attorney general says it’s a growing trend around the country. Nessel says the scheme is used to avoid paying workers the minimum wage as well as health and unemployment benefits they’re entitled to. She says it cheats other employers who play by the rules and shoulder those costs.
“And that’s just not fair – to anyone,” says Nessel. “Because they’re paying their workers half of what they should be paid, these shady companies can bid their costs 20 or 30% cheaper than legitimate businesses that play by the rules."
Democrats in the Legislature say they will back the effort with new bills. Business groups say they want the state to go after employers who try to get an unfair advantage over competitors by illegally avoiding employee costs. But some expressed concern the state will get too aggressive with employers who make honest mistakes.