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Minnesota AG secures $300K settlement over worker misclassification

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Sunday, December 22, 2024

Minnesota AG secures $300K settlement over worker misclassification

State AG
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Attorney General Keith Ellison | Official Website

Minnesota Attorney General Keith Ellison has reached a settlement with Arise Virtual Solutions, Inc., addressing allegations that the company misclassified its workers as independent contractors. This classification reportedly violated Minnesota laws concerning minimum wage, overtime, and rest breaks. As part of the agreement, Arise will pay $300,000 in restitution to affected workers and cease operations in Minnesota.

Arise is based in Florida and connects remote customer service agents with large corporations seeking outsourced call center services. Over the past four years, around 300 customer service agents from Minnesota have worked on the Arise platform. These workers underwent unpaid training before being allowed to work from home as customer service agents. Due to their classification as independent contractors, these agents were not eligible for benefits such as minimum wage, overtime pay, meal and rest breaks, workers' compensation, or unemployment insurance.

Attorney General Ellison commented on the issue: “Employer misclassification fraud hurts workers who were misclassified and their families, but it also hurts businesses who play by the rules and are undercut by competition willing to break the law.” He further noted that this practice harms taxpayers because employers avoid paying what they owe.

Eligible Minnesota-based workers who trained or worked on the Arise platform since May 19, 2020, will receive a share of the $300,000 settlement fund. A claims administrator will contact them regarding restitution payments.

The problem of employer misclassification was highlighted earlier this year by a report from the Office of the Legislative Auditor (OLA), which found that 22% of audited workplaces had at least one employee misclassified.

In response to growing concerns about worker misclassification fraud, Attorney General Ellison established an Advisory Task Force on Worker Misclassification in July 2023. The task force's policy proposal contributed to a significant bill passed during the 2024 legislative session aimed at combating employer misclassification fraud. This legislation created an Intergovernmental Misclassification and Enforcement Partnership to enhance detection and deterrence efforts.

Workers with concerns about misclassification can reach out to the Attorney General’s Office through its online complaint form or by phone.

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