DOL Announces Memorandum to Address Misclassification of Employees

by Art Gutman Ph.D., Professor, Florida Institute of Technology

In a news release dated September 19,2011, DOL Secretary Hilda Solis announced an agreement between the DOL and IRS to improve efforts to identify employer practices of misclassification of employees that serve to avoid provision of federal employment protections. Eleven state leaders representing seven signed the memorandum (Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington). Solis also announced agreements with state labor agencies in Hawaii, Illinois and Montana, and with New York’s attorney general. According to the release:

The memorandums of understanding will enable the U.S. Department of Labor to share information and coordinate law enforcement with the IRS and participating states in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.

The primary example given that would “change, obscure, or eliminate the employment relationship” is denial of rights for an employee who is classified as an independent contractor, and therefore, loses federal protections under various laws. The memorandums were a product of “Misclassification Initiative” spawned by Vice President Biden’s Middle Class Task Force.

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