11Alive Investigators: Georgia's missing workers hidden in plain sight
If you need driving directions in Atlanta, Gordan Grainger is your man. As a driver for Carey Limousine, he’s driven 2.5 million miles on the streets of Atlanta over the past 21 years.
But, Grainger is far from a happy long-time company guy. Carey Limousine actually doesn’t even consider him an employee.
“They consider me an independent contractor,” said Grainger.
As an independent contractor, Grainger pays his own employment taxes; doesn’t get benefits from Carey or vacation time.
Grainger believes he and his fellow drivers are completely controlled by Carey Limousine. “They actually tell me when to work, where to work, how to work. We have an iPad that’s generated by the company and every little item that we do in relation to doing a pickup we have to note it on our iPad,” said Grainger.
Gordan says Carey requires its drivers to form Limited Liability Companies, L.L.C. That way, Carey technically hires the L.L.C. as an independent contractor, not as an employee. The contractor status allows Carey Limousine to legally avoid paying numerous taxes, like Social Security, and state unemployment insurance tax.
Unemployment Insurance is a joint state-federal program that provides cash benefits to workers laid off from work. It’s intended to provide temporary financial assistance to unemployed workers who are unemployed through no fault of their own.
While Carey doesn’t consider Gordon an employee, this past March, a judge recently ruled the limo company misclassified one of its former drivers. According to the ruling, the admistrative law judge wrote the L.L.C. “simply had no business purpose, identity or functionality except for avoidance of taxes. “
DOCUMENT: Click her to read the judge’s ruling
Willie Garrett is that former driver. Carey Limousine is now appealing the ruling as well as Garrett’s unemployment insurance claim after he says he was laid off.
Since he was laid off in 2014, he’s been fighting with the Georgia Department of Labor for unemployment insurance benefits. “It’s very frustrating because there are thousands and thousands of people that’s going through this,” said Garrett.
Eight months later, Grainger says it’s business as usual at Carey. He’s still considered an independent contractor and the Georgia DOL has yet to contact him.
Becki Smith is an attorney and deputy director for the National Employment Law Project.
“Generally, if you’re misclassifying one worker, you’re misclassifying other workers as well,” said Smith. “Unfortunately, it’s a really common tax evasion technique for employers to call employees what they aren’t – self-employed, independent contractors” said Smith.
The 11Alive Investigators requested an interview with Carey Limousine. It’s vice president, Dennis DeLoatch, claimed he didn’t know about the judge’s decision until we told him.
DeLoatch also wouldn’t answer questions involving Garrett’s employment or the judge’s ruling. “My apologies for hanging up on you but I did advise that I had no further comments,” DeLoatch wrote in an email.
The Georgia DOL is the agency in charge of catching employee misclassification, but an 11Alive investigation uncovered the agency is likely not doing enough, missing out on collection millions of tax dollars.
The U.S. Department of Labor estimates Georgia is owed $808 million dollars in unemployment insurance tax due to companies misclassifying workers.
It could be more. According to a 2015 Georgia Senate subcommittee report, “It is difficult to estimate just how much misclassifying employees is costing Georgia …because Georgia has not conducted any far-reaching studies to examine the practice as other states have done.”
The National Employment Law Project estimates 10 to 30 percent of companies misclassify workers. The 11Alive investigators discovered Georgia only audits one percent of its employers, the minimum standard set by the U.S. Department of Labor.
“Auditing one percent of employers just won’t do the trick,” said Smith. “It won’t stop misclassification and payroll fraud,” Smith argued.
Thirty five states participate in federal nation-wide misclassification initiatives to catch rogue companies. Nineteen other states also have special task forces to combat the problem. Georgia doesn’t participate in either of those.
“No, Georgia does not have an audit task force. One of the tasks of Georgia’s 89 field tax auditor positions is to conduct audits,” wrote Sam Hall, GA DOL’s spokesperson in an email to 11Alive.
Hall also said the federal misclassification initiative offered no financial incentives to participate.
“The [Georgia] Department of Labor, one of their purposes is to protect workers from abuses by employers,” said Grainger. “ To be honest with you, I think [GA DOL] needs to be investigated.”.
Georgia Labor Commissioner Mark Butler agreed to an interview with 11Alive News. It was scheduled more than a week in advance. Hours before the interview, his spokesperson cancelled it.
In October, the agency held a conference on employee misclassification and unemployment insurance in Waycross, Georgia, about four hours south of Atlanta.
The 11Alive investigators paid to attended conference, but staff declined to answer any questions once we arrived.
Do you think you’re a misclassified employee?
Options for Reporting
Print the appropriate document and fax or mail to the appropriate unit. These documents are in PDF format and require Adobe Acrobat Reader to view or print. A free software download is available from the Adobe website.
To report unemployment benefit fraud and abuse - Complete the UI Suspected Fraud and Abuse Reporting Form
To report that you suspect someone has used your Social Security Number to work, file a claim and/or receive UI benefits - Complete the UI Suspected Fraud and Identity Theft Form
To report a job refusal, failure to report to work or a failed pre-employment drug screening test - Complete the UI Job Refusal and Failed Pre-Employment Drug Screening Form