The penalties for employers that misclassify workers can easily reach millions of dollars—a fate broker-dealers and insurance companies, which allow reps and agents to hang out their own shingle as independent contractors, hope to avoid.
In one of the largest settlements in recent history, Uber agreed to pay up to $100 million to settle class action lawsuits brought by drivers in California and Massachusetts who claimed that they were misclassified as independent contractors. The company’s initial payment to the 385,000 drivers was $84 million.
The FSI is also lobbying to derail the Protecting the Right to Organize Act (PRO). Beyond making it easier to create unions, the bill would make it difficult for advisors to operate as independent contractors. As written the bill would make independent advisors employees of their broker-dealers.
The bill is currently idling in the Senate after being approved by the House last February.