Employee misclassification causes headaches for both workers and employers, and the federal government and the states are joining hands to ease the pain.
Misclassification often has substantial consequences for all parties involved—employers and workers, as well as the federal government and the states. Misclassifying an employee as an independent contractor may result in denial of minimum wages, overtime compensation, family and medical leave, and unemployment and workplace safety protections. Employers may face costly lawsuits and be liable for unpaid overtime and minimum wages, as well as back pay, court costs and attorneys’ fees.
For these reasons, the Department of Labor is entering into enforcement partnerships with state agencies for “information sharing and coordinated enforcement” in support of its Misclassification Initiative, according to its website.
Joint federal-state efforts likely will continue to play a large role in the future of worker misclassification enforcement as more states enter into formal agreements with the DOL.
DOL’s Misclassification Initiative and State Partnerships
The DOL has signed formal partnership agreements with state agencies across the country as part of its Misclassification Initiative. This initiative is rooted in Vice President Joe Biden’s Middle Class Task Force, according to past DOL news briefs.
The department states that the purpose of these partnerships is for “providing clear, accurate and easy-to-access outreach to employers, employees and other stakeholders…sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.”
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Source: Bloomberg BNA