‘Blumenthal backs “misclassification” bill but ducks questions about WWE’ (Manchester Journal Inquirer)

Reprinted in full with permission.

Blumenthal backs ‘misclassification’ bill but ducks questions about WWE

by Don Michak

Manchester Journal Inquirer

U.S. Sen. Richard Blumenthal, flanked Monday by state labor Commissioner Glenn Marshall and a bevy of construction industry and labor representatives, trumpeted his co-sponsorship of a bill that would protect workers from being “misclassified” as independent contractors or part-timers by their employers.

But the former state attorney general – who as a Democratic candidate last year questioned whether his Republican opponent, Linda McMahon, had done exactly that as the former chief executive officer of World Wrestling Entertainment Inc. – ducked when asked to comment on a misclassification audit of WWE reportedly initiated by the state Labor Department.

“This federal law is about industrywide and countrywide violations of basic fairness in misclassification, which is cheating, plain and simple,” Blumenthal responded. “It’s not about any one business or any one industry. It’s about construction, but it’s also about a variety of other areas where workers, honest businesses, taxpayers, and ordinary citizens are all cheated as a result of this practice.

“We’re going to fight for this proposal, regardless of allegations against any one business,” he added.

Meanwhile, Marshall, the former carpenters union official named three months ago by Gov. Dannel P. Malloy to head the Labor Department, also dodged when asked about the reported WWE probe.

“At this time I’m not in a position to divulge anything on that,” he said. “If there is an investigation, we can’t report on it. There are protections in place within the department – some of it’s federal and some of it’s state law – where we can’t divulge things when investigations are ongoing.”

Asked why, if he were bent on increasing public awareness of “misclassification,” he would keep secret the name of any company engaged in the practice, Marshall responded: “This is a broader venue that we’re talking about here and I’d rather not get specific about if there is an investigation ongoing.”

The officials, speaking at the Wethersfield office of the Connecticut Construction Industries Association, characterized misclassification as a means for unscrupulous employers to cut costs and avoid contributions for unemployment and workers compensation.

They said such workers don’t qualify for minimum wage and overtime compensation and aren’t protected by anti-discrimination and health and safety laws. Businesses that properly classify their employees are put at a competitive disadvantage, they said.

The Labor Department was reported to have begun a misclassification audit of WWE in September, although one department source has since said it had become focused on whether the company underpaid unemployment insurance taxes.

McMahon, who before launching her Senate bid had headed the company that classifies its wrestlers and other employees as independent contractors, initially said she was unaware of any audit.

A WWE spokesman, meanwhile, denied any corporate wrongdoing and told the Stamford Advocate that the state had “curiously” begun auditing the company as McMahon made her first run for public office.

The McMahon campaign subsequently suggested Blumenthal was behind the probe, and he responded that while he had worked with a task force looking for ways to reduce the practice, he was not involved in the Labor Department investigation.

Blumenthal on Monday again emphasized his work on behalf of a state law signed into law last spring that increased the fine from $300 per incident to $300 a day per violation for employers who misclassify employees as independent contractors.

“That law has been strengthened as a result of the report that was done,” he said. “I was co-chair of the committee and I’ve been working on this problem for years.”

The freshman senator said the proposed Payroll Fraud Prevention Act drafted by Sen. Sherrod Brown, D-Ohio, would “take Connecticut’s law as a model” and establish misclassification as separate federal violation.

He said it also would set a $1,100 fine for each violation and a $5,000 fine for each repeated violation, require employers to keep records and notify workers exactly how they are classified, and protect workers who report violations.