Employee misclassification crackdown: DOL shells out millions to fund detection and enforcement


From HR.BLR.com, Jasmin M. Rojas, JD writes “For a while we have been telling you that the United States Department of Labor (DOL) is serious about cracking down on employee misclassification. Since announcing its Misclassification Initiative in September 2011, the DOL continues to make employer compliance with the Fair Labor Standards Act (FLSA) a top priority.

In July 2013, the DOL confirmed its commitment to this initiative, characterizing employee misclassification as “workplace fraud.” This is because misclassification of workers hampers tax compliance and improperly, in the agency’s view, denies affected workers the protections employees receive under federal and state law.

To illustrate, employers do not pay employment taxes for independent contractors and do not withhold federal, state, and local taxes from payments made to independent contractors. Also, independent contractors are not included in an employer’s benefits programs, and they are generally not eligible for unemployment benefits.

DOL is putting its money where its mouth is

On September 15, 2014, the DOL announced that it awarded $ 10,225,183 to 19 states to implement or improve worker misclassification detection and enforcement initiatives in unemployment insurance programs. According to the DOL, these funds will assist the 19 states in identifying improperly classified employees and “under the table” workers….”

Read the full story at Employee misclassification crackdown: DOL shells out millions to fund detection and enforcement.

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