With Highway Trust Fund Set to Expire, Sen. Brown Announces Bill That Would Raise Funds For Transportation Projects and Protect Workers and Businesses by Addressing Tax Fraud and Worker Misclassification

WASHINGTONJune 25 -- The office of Sen. Sherrod Brown, D-Ohio, has issued the following news release:

With the Highway Trust Fund facing insolvency, which could cost Ohio millions of dollars, U.S. Sen. Sherrod Brown (D-OH) held a news conference call today to announce legislation that would raise funds for job-creating infrastructure projects while protecting workers and businesses that play by the rules. The Fair Playing Field Act would ensure that fulltime employees are no longer misclassified as independent contractors, which not only allows employers to deny employees basic workplace protections, but also deprives local and state governments billions of dollars in tax revenue and puts businesses that do play by the rules at a competitive disadvantage. Brown's legislation would also raise enough revenue to help fund a short term transportation bill.

"When employers misclassify employees, workers, other businesses, and taxpayers lose. But time and time again, employers use loopholes to protect their profits at the expense of the workers and businesses that play fairly," Brown said. "If employees are classified as independent contractors, then an employer doesn't have to pay them the benefits they've earned. This isn't right, and the Fair Playing Field Act would allow the IRS to put a stop to this. Not only would it protect workers and their families, but it would strengthen the economy by reducing the deficit and allow businesses to compete on an equal playing field.

"Further, funding transportation projects is vital to strengthening our nation's economic competitiveness and ensuring that thousands of hardworking Ohioans continue to rebuild our bridges and roads," Brown continued. "The Fair Playing Field Act is a commonsense way to raise enough revenue to help the government pay for a short term transportation bill."

Worker misclassification is widespread in sectors like construction, transportation, maintenance and janitorial services, agriculture, and child care--industries that employ some of the lowest-paid and most vulnerable American workers. By classifying workers as independent contractors rather than employees under Federal tax law, employers can avoid paying payroll taxes, unemployment insurance and workers' compensation. Workers who are classified as independent contractors are also denied the protection of critical labor laws such as the Fair Labor Standards Act and the National Labor Relations Act, including minimum wage and overtime rules and the right to unionize.

Further, businesses that misclassify their workers can avoid many of their tax obligations, depriving governments of much needed revenues and adding to the federal deficit. In fact, the Government Accountability Office (GAO) estimates that the Federal government loses billions of dollars annually inSocial Security, unemployment insurance, and income tax revenue due to misclassification.

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