From the Independent Contractor Compliance and Misclassification Legal Blog, Richard J. Reibstein, Lisa B. Petkun, and Andrew J. Rudolph discuss the annual report issued by New York’s Joint Enforcement Task Force on Employee Misclassification. They write:
“On February 1, 2015, the Joint Enforcement Task Force on Employee Misclassification issued its Annual Report. The Report noted that the New York Task Force members in 2014 conducted over 12,000 audits and investigations, resulting in detection of employee misclassification involving over 133,000 workers. Those and other enforcement efforts in 2014 in New York culminated in the discovery of $316 million in unreported wages, leading to assessments of $40.4 million in unemployment insurance contributions. Since 2007, joint enforcement activities in New York have identified made unemployment insurance assessments on nearly $2.1 billion in unreported wages.
The Task Force defines employee misclassification as comprising both misclassification of employees as independent contractors, and unreported employment or “off-the-books” work. The Report notes that independent contractor misclassification arises because employers believe that certain workers paid on a 1099 basis meet the standard for independent contractor status (i.e., unintentional misclassification) or they may deliberately misclassify their employees in order to evade regulations protecting employees and associated payroll and unemployment taxes (i.e., intentional or willful misclassification)…”
Read the full story at 133,000 Misclassified Workers Detected in New York in the Course of 12,000 Audits and Investigations in 2014, According to the State’s Newest Task Force Report on Employee Misclassification
In addition, the report identified the job categories showing the highest incidence of worker misclassification based on 13,000 audits and investigations conducted by the Department of Labor in 2013. These categories include:
- Professional, Scientific and Technical Services;
- Food/Drink Services;
- Administrative and Support Services;
- Ambulatory Health Care Services;
- Construction of Buildings;
- Educational Services;
- Performing Arts, Spectator Sports, and Related Industries;
- Specialty Trade Contractors:
- Personal and Laundry Services;
- Couriers and Messengers;
- Motion Picture and Sound Recording Industries;
- Amusement, Gambling and Sound Recording Industries.
Finally, the report states:
“A recent study based on audits in New York employment records found that up to 10% of the employees covered by the audits may have been misclassified”
While misclassification is an important issue,this statement suggests that at least 90% of workers covered by the audits were properly classified. Your view of the extent of the problem may depend on whether you are a glass half full or glass half empty person.
Read the full report at Annual Report of the Joint Enforcement Task Force on Employee Misclassification.