Gov. McAuliffe Signs Executive Order Establishing Inter-Agency Task Force on Worker Misclassification

From NBC29 WVIR Charlottesville, VA News, Sports and Weather —

Office of Governor Terry McAuliffe Press Release
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Every Virginian who works hard and follows the rules should get the pay and benefits that they deserve,” said Governor McAuliffe “This executive order will begin a process to ensure that employers throughout the Commonwealth follow the same rules when it comes to benefits and pay for their employees.”
The text of executive order number 24 is as follows:…
The misclassification of employees as “independent contractors” undermines businesses that follow the law, deprives the Commonwealth of millions of dollars in tax revenues, and prevents workers from receiving legal protections and benefits.
A 2012 report of the Joint Legislative Audit and Review Commission (JLARC) found that one third of audited employers in certain industries misclassify their employees. By failing to purchase workers’ compensation insurance, pay unemployment insurance and payroll taxes, or comply with minimum wage and overtime laws, employers lower their costs up to 40%, placing other employers at a competitive disadvantage.
Based on state and national studies, JLARC estimated that worker misclassification lowers Virginia’s state income tax collections as much as $28 million a year. Agencies with relevant enforcement responsibilities, including the Virginia Employment Commission, the Department of Labor and Industry, the Department of Professional and Occupational Regulation, the State Corporation Commission’s Bureau of Insurance, the Department of Taxation, and the Workers’ Compensation Commission each address only one component of this practice and may not fully coordinate their efforts. In its study, JLARC recommended the establishment of a task force….
Initiatives
The purpose of the Taskforce is to develop and implement a comprehensive plan with measureable goals to reduce worker misclassification and payroll fraud in Virginia. The activities of the Taskforce should include, but not be limited to:
1. Review statutes and regulations related to worker misclassification and payroll fraud;
2. Evaluate current enforcement practices of the agencies involved;
3. Develop procedures for more effective inter-agency cooperation and joint enforcement;
4. Implement a pilot project for joint enforcement;
5. Develop educational materials and an outreach strategy for employers;
6. Advise on any technological improvements in worker misclassification and payroll fraud detection; and,
7. Recommend any appropriate changes to relevant legislation or administrative rules….”

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