State senators stood strong yesterday against the use of unfair and illegal employee misclassification practices, voting unanimously to pass the Employee Fair Classification Act (SB694). The bill, which will now head to the House, establishes the Employee Classification Division within the Office of State Budget and Management, overseeing and enforcing new, balanced procedures to ensure North Carolina’s workers are classified properly.

Employee misclassification harms law-abiding employers and employees alike, as some companies attempt to gain unfair and illegal competitive advantages by wrongly counting workers as independent contractors to avoid paying them the fair benefits of full-time employees. Among other measures, Senate Bill 694 will deter this illegal practice by assessing civil penalties of up to $1,000 for each case of employee misclassification for repeat offenders, and barring offenders from receiving state contracts for a period of five years.

This bill provides the balanced protections needed to ensure North Carolina’s law-abiding businesses and workers are treated fairly. We thank the bill sponsors – Senators Buck Newton, Michael Lee and Warren Daniel – for addressing this important issue, and thank the Senate for acting decisively to curb unfair and illegal employee misclassification. We now urge members of the House to support to this vital jobs bill.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber