WorkersCompensation.com reports that Louisiana Workforce Commission has conducted unannounced site inspections in an attempt to combat misclassification of workers as independent contractors. WorkersCompensation.com writes:
Teaming with partner agencies, the Louisiana Workforce Commission (LWC) conducted unannounced site inspections today as the agency ramps up efforts to combat the unethical business practice of misclassifying workers.
“Unannounced site inspections will continue until the unfair business practice of misclassifying workers stops,” said LWC Secretary, Ava Dejoie. “Our message is clear – misclassifying workers will not be tolerated in our state.”
Construction sites in the New Orleans area were inspected by unemployment insurance tax auditors and workers’ compensation authorities from LWC, as well as other agency representatives from GAME ON. The unannounced inspections were based on credible tips received by task force members.
GAME ON is the acronym for Government Against Misclassified Employees Operational Network, a statewide, multi-agency task force organized last year to fight the problem of misclassified workers. Members of the task force along with the LWC are the Louisiana Department of Revenue (LDR), the U.S. Department of Labor’s Wage and Hour Division and the Internal Revenue Service (IRS).
Results from the unannounced inspections will take several weeks to finalize. Over the past year, the LWC has focused efforts to curb worker misclassification, primarily through its Unemployment Insurance Field Tax Audit unit. Since July 1, 2017, field auditors have completed nearly 1,000 audits of companies, uncovering more than 3,3000 misclassified workers.
“The 3,300 misclassified workers resulted in more than $11 million in unreported taxable wages and hundreds of thousands of dollars in unpaid unemployment taxes,” Secretary Dejoie said. “This practice creates a financial disadvantage to those companies that are complying with employment and payroll laws.”
The misclassification of workers is particularly prevalent in the construction industry where labor brokers and contractors routinely and deliberately classify their workers as independent contractors and add to their profit margin by failing to deduct withholdings or pay unemployment taxes, by not paying federally mandated overtime compensation, and also not securing workers’ compensation coverage. Labor brokers and contractors say the workers they use are independent contractors, not employees. “But, simply calling someone an independent contractor doesn’t make it so,” Secretary Dejoie said.
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