Vital as these workers are to the labor force, they are often mistreated, underpaid and sometimes even abused. Employers sometimes use threats and intimidation to silence these workers from reporting workplace injuries, wage theft violations and sexual abuse.
Although these workers aren’t the only labor force to suffer from a concept known as “misclassification,” they certainly are subjected to it quite often.
Misclassification refers to an illegal practice by employers of classifying workers as “independent contractors” rather than “employees” to evade paying workers’ compensation insurance premiums, benefits, certain taxes and fair wages.
This was what was alleged in the recent case of Perez v. D. Howes, LLC, before the U.S. Court of Appeals for the Sixth Circuit. Here, the U.S. Secretary of Labor, Thomas E. Perez, brought action against the owner of a farm alleged to have violated federal worker protection laws.
According to court records, the labor secretary filed a lawsuit following an investigation by the Department of Labor in which defendant was alleged to have paid and treated workers toiling in defendant’s cucumber fields as independent contractors. However, the labor department’s investigation revealed they were, in fact, employees.
This determination is made not based on what an employer labels the workers, but rather through careful analysis of the nature of the relationship.
- The permanency of the relationship between worker and employer
- Worker’s investment in equipment or materials required for the task (does he own his own, or is he primarily using the employer/company’s tools?)
- Are the worker’s profits or losses based on the skill of the job?
- The nature and degree of employer’s control over the performance of the worker
- The extent to which the services provided by the worker are central to employer’s business
Initially, it was the U.S. District Court in Michigan that weighed the case.
The workers in question were employed as cucumber harvesters at defendant’s farm, which he’s owned since 2009. During the second-year harvest, he employed 38 migrant workers. Twenty-six of those had worked for him the previous year. Some workers had other jobs, but most were expected to work for defendant exclusively during season.
Prior to the start of each work year, workers were required to sign an independent contractor agreement.
While defendant provided most supplies, workers did sometimes bring their own plastic gloves and wheelbarrows.
Defendant initially came onto the department’s radar when he was fined by the state department of agriculture for providing substandard housing to migrant workers. As part of the settlement reached, he agreed to no longer offer this type of housing to workers (who paid rent during their stay).
However, the following year, he was involved in helping his cousin perform some maintenance on migrant housing he owned and arranging to have those units rented by workers for $25 a week. When the department of agriculture came to inspect, they found unsanitary toilet facilities, broken showers, standing waste water, broken screen doors, active bees nests and debris throughout the housing (referred to as “the camp”).
This by extension resulted in an investigation of defendant’s cucumber fields. Defendant interfered with this investigation by attempting to record statements made to the federal investigator, even after being told he was not allowed to do so. The interview process had to be terminated because of defendant’s involvement.
District court decided the case on summary judgment, as there were no disputed issues of material fact. It determined, based on the totality of the circumstances, the workers are employees and further defendant had interfered with a federal investigation into labor law violations. For this reason, combined with his previous failure to comply and lack of promise to comply in the future, the court found the labor department’s injunction warranted.
The injunction requires defendant to keep accurate records, refrain from interfering with department of labor investigations and supply adequate housing for migrant workers, if he is granted permission to do so by the DOL.
The Sixth Circuit affirmed.
Any violations from this point on could be met with substantial fines. Defendant may also be sued by the workers for labor violations, including for wage and hour violations.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.
Work Permits for Undocumented Workers in California, July 7, 2015, Orange County Employment Attorney Blog