Federal & State Coordinate Efforts to Crackdown on Employee Misclassification

The U.S. Department of Labor recently signed a memorandum of understanding with the labor commissioners from seven states, including Connecticut, to share information and coordinate law enforcement efforts with each other and the IRS. In particular, the agreement targets businesses that misclassify employees as independent contractors. Employers must pay unemployment and other taxes, and provide workers’ compensation insurance and other employment rights for workers who are employees, but not for those who are independent contractors. Ultimately, the agreement hopes to “level the playing field for law-abiding employers,” and make sure that employees are properly protected under state and federal laws.