The Labor Project of the National State Attorneys General Program is committed to the vigorous enforcement of state labor laws. This commitment has been reflected in the production and dissemination of scholarly research and the building of cooperation and communication between state and federal regulators, businesses, advocates, and academics.
In 2011, the Labor Project published a study of state enforcement of wage and hour laws—the first of its breadth and depth to be conducted on a national scale—and hosted a meeting of state and federal regulators, academics and advocates to discuss improving enforcement of labor laws at both the state and federal levels. The results of these initiatives compelled the conclusion that increased prosecution of employer payroll fraud would be an effective platform for protecting workers, improving state fiscal health and leveling the playing field for employers who play by the rules. The Labor Project's efforts are now focused on this issue, including a new initiative to gather and make available resources to encourage and support state regulators as they enhance identification, investigation, and conduct criminal and civil prosecution of employers who evade workers’ comp, unemployment insurance, and payroll taxes by knowingly misclassifying workers as “independent contractors,” paying in cash off the books, or engaging in a variety of other illegal activities that support payroll fraud, such as racketeering, money laundering and criminal conspiracy.
TABLE OF CONTENTS
Federal Materials
State Materials
Alabama Arizona Arkansas California Colorado Connecticut
Delaware District of Columbia Florida Hawaii Illinois Indiana
Iowa Kansas Kentucky Louisiana Maine Maryland
Massachusetts Michigan Missouri Montana Nebraska
Nevada New Hampshire New Jersey New Mexico New York
North Carolina North Dakota Ohio Oklahoma Oregon
Pennsylvania Rhode Island South Carolina South Dakota
Tennessee Utah Vermont Virginia Washington Wisconsin
FEDERAL MATERIALS [back to top]
LEGISLATIVE MATERIALS
Sen. Sherrod Brown, Press Release: Senate HELP Committee Examines Worker Misclassification (June 17, 2010), (Ohio Senator Sherrod Brown describing hearing of Senate Health, Education, Labor and Pensions (HELP) Committee titled, "Leveling the Playing Field: Protecting Workers and Businesses Affected by Misclassification” and Sen. Brown’s introduction of legislation to address misclassification, the Employee Misclassification Prevention Act)
Sen. Sherrod Brown, Employee Misclassification Prevention Act – Fact Sheet, (One-page summary of the 2010 version of the Employee Misclassification Prevention Act)
S.770: Payroll Fraud Prevention Act (bill overview), Govtrack.us (April 8, 2011), (History and overview of 2011 Payroll Fraud Prevention Act, a stripped down version of the 2010 Senate version of the Employee Misclassification Prevention Act)
H.R. 3178: Employee Misclassification and Prevention Act (bill overview) (112th Congress, 2011-2012) Govtrack.us (Oct. 13, 2011), (2011 House version of the Employee Misclassification and Prevention Act, which mirrored the comprehensive 2010 version of the Act)
AGENCY REPORTS AND MATERIALS
Internal Revenue Service, Independent Contractor (Self-Employed) or Employee?, (last visited Jan. 11, 2013) (providing guidance as to determination and consequences of employee/contractor classification)
U.S. Immigration and Customs Enforcement (ICE), Fact Sheet: Illegal Pay Schemes - Operation Paycheck (May 29, 2012), (Fact sheet describing federal Immigration and Customs Enforcement's (ICE) investigation into tactics used by employers to pay their illegal employees, including the use of complicit money services businesses, shell corporations, structuring transactions to evade reporting requirements and failing to file currency transaction reports)
U.S. Dept. of Labor, Wage and Hour Division: Employee Misclassification as Independent Contractors, (last visited Nov. 1, 2012) (U.S. Department of Labor, Wage and Hour Division web page on employee misclassification, including applicable standards under the Fair Labor Standards Act (FLSA), state-federal cooperation through memorandums of understanding, compliance assistance, and industry-specific resources)
Tom Crowley, Unemployment Insurance Tax Chief, U.S. Department of Labor, Worker Misclassification: An Update from Constitution Ave,NASWA 2012 UI Director’s National Conference Reno, Nevada (2012), (Powerpoint from Unemployment Insurance Tax chief's presentation, including legal standards for determining employment status, safe harbor provisions for erroneous classification, tax incentives to engage in misclassification, state and federal initiatives and collaborations, and auditing practices and results)
United States Government Accountability Office, Employee Misclassification: Improved Coordination, Outreach and Targeting Could Better Ensure Detection and Prevention (Aug. 2009), (Estimating extent of misclassification enforcement by Department of Labor and Internal Revenue Service at time report was written, state and federal experience with collaboration and analysis of various enforcement options)
CASE MATERIALS
Alston & Bird LLP, Federal Appeals Court Finds Davis-Bacon Violations Can Lead to False Claims Act Liability, Lexology, (Oct. 19, 2012), (Article detailing Sixth Circuit Court of Appeals decision holding the the federal False Claims Act (FCA) allows construction workers on federal projects to sue employers for back pay and damages, where, in violation of the David-Bacon Act, an employer pays a worker less than the prevailing wage and submits false payroll certifications)
U.S. ex rel. Brian Wall v. Circle C Construction LLC, No. 10-5645 (6th Cir. Oct. 1, 2012), (Holding that a falsification of payroll certifications required by the Davis-Bacon Act - as opposed to the proper classification of a worker, the determination of which is within the sole purview of the U.S. Department of Labor - may subject a contractor on a federal project to civil liability under the False Claims Act (FCA)
Memorandum Opinion and Order, Solis v. International Detective and Protective Services et al., Case No. 09 C 4998, (Granting USDOL's motion for summary judgment on its action under the Fair Labor Standards Act to recover overtime compensation and liquidated damages arising out of defendant's misclassification of employees)
Findings of Fact and Conclusions of Law Regarding Liability, Solis v. Cascom Inc. et al., Case No. 3:09-cv-257(Sept. 21, 2011), (Finding, after a non-jury trial, that cable installers hired by defendant were misclassified as independent contractors, in violation of the Fair Labor Standards Act)
United States Department of Labor, Press Release: US Labor Department Recovers More Than $219,000 in Back Wages and Liquidated Damages for 44 Misclassified Boston-area Restaurant Employees (March 7, 2011), (finding that three Massachusett's restaurants had misclassified employees by moving existing employees off of their payroll and onto the payroll of a staffing company, labeling them as independent contractors, and no longer paying them for overtime)
Karagozian v. Costy US LLC, 2011 U.S. Dist. LEXIS 13974 (S.D.N.Y. Feb. 10, 2011) (Plaintiff's allegation that defendant mailed tax forms inaccurately reflecting his employment classification was insufficient to allege mail fraud under RICO)
United States Department of Labor, US Department of Labor Recovers More than $203,000 in Overtime Back Wages for 224 drywall installers in Lafayette, LA (Jun. 7, 2011), (Contractor underreported number of employees and payroll. He was charged and pleaded guilty to insurance fraud and workers’ compensation fraud)
Emily E. Smith, Hillsboro Contractor Pleads Guilty to Criminal Antitrust, Racketeering in Pearl District Project, Elsewhere, The Oregonian (July 29, 2011), (News story detailing guilty plea by a contractor, owner S&S Drywall, who was charged with 24 counts, including criminal antitrust, racketeering, first-degree theft, obstructing governmental administration, tampering with evidence, first-degree forgery, conspiring and money-laundering, schemes in which he forced employees to pay him large portions of their paychecks from a public works job and allowed employees them to continue working for him while they collected unemployment benefits after he laid them off)
The United States Attorneys Office, Southern District of Florida, Pompano Construction Company Owners Sentenced in Workers’ Compensation, Tax and Mail Fraud Conspiracy (March 25, 2009), (U.S. Attorney for the Southern District of Florida press release detailing sentencing in case against partners in a drywall installation and cabinetry company for tax and mail fraud conspiracy arising from a scheme to underpay federal income tax and workers' compensation insurance premiums by paying employees as "off-the-books" workers)
Affidavit in Support of Search Warrant, Oregon DOJ Case No.: COC0065-09, (Detailing evidence gathered during investigation of contractor, owner of S&S Drywall, in support of an application for a search warrant for evidence used as part of the contractors payroll fraud schemes, which allegedly included racketeering, money laundering, misclassification of employees, tax fraud and theft)
STATE MATERIALS [back to top]
ALABAMA
LEGISLATIVE AND STATUTORY MATERIALS
Ala.Code Ann.1975 §25-5-50 (West 2012), (Amends existing law relating to the exemption from workers' compensation coverage for certain independent contractors and classes of employees)
ARIZONA
LEGISLATIVE MATERIALS
Ariz. HB 2150, Chapter 115, Independent Contractor Unemployment Insurance (Signed into law Mar. 29, 2012), (Amending existing law in several ways relating to unemployment insurance, independent contractors, indications of employer control, and providing for determinations of contribution rate, redetermination or denial)
ARKANSAS [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
H.B. 1324, An Act to Create the Employee Classification Act; to Address the Practice of Misclassifying Employees as Independent Contractors for Purposes of Unemployment Insurance (88th General Assembly 2011), (Defines independent contractors for the building construction industry and creates penalties for employers who improperly classify employees for purposes of the Department of Workforce Services Law)
H.B. 1325, An Act to Address the Practice of Misclassifying Employees as Independant Contractors for Purposes of Worker's Compensation and to Indirectly Amend Initiated Act 4 of 1948, (Defines independent contractors for the building construction industry and creates penalties for employers who improperly classify employees for purposes of the Department of Workers Compensation Law)
AGENCY REPORTS AND MATERIALS
Arkansas Department of Workforce Services, Notice to All Businesses: What is Worker Misclassification? (2010), (last visited Nov. 4, 2012) (State agency webpage defining worker misclassification and introducing the state’s legal test for establishing worker classification and the presumption that a worker is an employee unless an employer proves otherwise)
Arkansas Department of Workforce Services, Properly Classifying Workers for Arkansas UI Tax Purposes, (Setting out in detail the legal definition of an employee and the test used for determining employment classification) (last visited Nov. 4, 2012)
Arkansas Department of Workforce Services, Employer Unemployment Insurance Contribution, (last visited Nov. 4, 2012) (Setting out the purpose, requirements, exemptions and other details on the state’s unemployment insurance program)
CALIFORNIA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Private Attorney General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698, et seq., (Allowing a private citizen to pursue civil penalties on behalf of the State of California Labor and Workforce Development Agency (“LWDA”)—provided the formal notice and waiting procedures of the law are followed—and to receive a portion (25%) of any resulting civil penalties, with the remainder (75%) going to the state) See also Michael Tracy, Private Attorney General Act of 2004: You Enforce the Law, (Website by private attorney providing details on the Private Attorney General Act of 2004, including requirements for a cause of action, what labor sections can support such an action, nature of damages that may be awarded and information for attorneys who practice in the area) (last visited Nov. 4, 2012)
Cal. Labor Code § 226.8 (2012), (Prohibiting willful misclassification of an individual as an independent contractor and imposes penalties of up to $15,000 per incident and up to $25,000 if the violator is deemed to be engaging in a pattern of violations; statute also provides that the violator will be subject to disqualification from government contracts and must prominently post on its web site and in its place of business a notice informing employees the fact that it has been penalized under this law and describing the procedures for employees to make complaints to the Department of Labor)
INTERAGENCY TASK FORCE MATERIALS
State of California Employment Development Department, Joint Enforcement Strike Force (JESF) Combatting California’s Underground, (last visited Nov. 1, 2012) (Providing information on coalition of California State government enforcement agencies that work together to combat the underground economy to ensure a level playing field for California businesses)
State of California Department of Industrial Relations, Dept. of Industrial Relations - Labor Enforcement Task Force (May 2012), (Providing information on coalition of state agencies working with communities to combat the underground economy by ensuring employers proper payment of wages, a safe work environment, and submission of all taxes, fees and penalties due from employers)
Economic & Employment Enforcement Coalition, Report to the Director of the California Department of Finance & California Joint Legislative Budget Committee (Jan. 2012), (The final report of EEEC activities upon the consolidation of the EEEC into the Department of Industrial Relations (DIR) as the newly formed Labor Enforcement Task Force (LETF); EEEC’s work focused on combating the underground economy in the construction industry and in low-wage industries including agriculture; car wash; garment manufacturing; janitorial service; horse racing tracks; and restaurants)
State of California Employment Development Department, Underground Economy Operations, (Public webpage describing EDD’s activities around the underground economy, including its three primary programs, Employment Enforcement Task Force, the Labor Enforcement Task Force, and the Construction Enforcement Project)
CASE MATERIALS
Former Murrieta-Based Contractor Sentenced for Fraud, Murrieta Patch (Dec. 1, 2012), (reporting sentencing of local contractor convicted of defrauding state of $3 million in workers' compensation and unemployment insurance premiums; contractor sentenced to 7 years in prison)
California Dept. of Insurance, Press Release: Insurance Commissioner Dave Jones Announces Arrests of Central Valley Business Owners in Workers' Compensation Premium Fraud Case (Oct. 25, 2012) (Floor cleaning business owners arrested on counts of workers' compensation premium fraud, failure to pay taxes, tax evasion, and grand theft for under reporting over $5,000,000 in employee payroll to their insurance carrier, failing to pay the minimum wage and overtime; the investigation was carried out by the San Joaquin Valley Premium Fraud Task Force and is being prosecuted by the Fresno County District Attorney's Office)
Rachel Zentz, Pebble Beach Couple Sentenced for Tax Evasion, Workers’ Comp Fraud, Californian.com (Oct 16, 2012), (Owners of a laundry business and were sentenced for failure to maintain workers’ compensation insurance and failure to register as an employer and acting with an intent to evade taxes; the investigation was launched after prior employees contacted Monterey County District Attorney Dean D. Flippo after they were denied unemployment benefits after being fired)
Father and Daughter in Central Cailf. Workers’ Comp. Fraud Must Repay Over $600K, Insurance Journal (October 5, 2012), (Father (business owner) and daughter (CFO) pleaded guilty to insurance premium fraud for underreporting payroll in order to underpay insurance premiums and were ordered to pay restitution to California’s State Compensation Insurance (CDI) Fund in the amount of $475,100 and $127,899 to the Employment Development Department; investigation was a cooperative effort between CDI’s Fraud Division and the San Joaquin Valley Premium Fraud Task Force and the case is being prosecuted by the Kern County District Attorney’s Office)
District Attorney of Riverside County, News Release: Wildomar Man Convicted In $3.1 Million Workers’ Compensation Fraud Case (Sept. 21, 2012), (Jury convicts Steven Morales of workers’ compensation fraud, tax fraud and perjury, based on scheme in which Morales and his son formed and used various names for their businesses in order to hide payroll and to keep from paying workers’ compensation premiums, resulting in $3.1 million in losses; case was the result of a 13-month investigation by the Riverside County DA’s Bureau of Investigation in partnership with the state Employment Development Department)
The Fraud Report, Strip Club Owner Maybe not so ‘Angelic,’ Charged with Insurance Fraud (June 15, 2012) (Describing the arrest of an owner of a chain of bars, charged with six felonies including workers’ compensation insurance fraud and tax evasion, for reporting fewer employees than were actually on the payroll, among other allegations)
California Dept. of Insurance, Insurance Commissioner Jones Announces Sentencing of Bay Area Business Owner for Insurance Fraud (June 28, 2011), (Building contractor (Monica Ung) plead guilty to violations of California’s Insurance and Labor Codes and was sentenced to four-year suspended prison sentence and $1.2 million in restitution on the grounds that she intentionally misrepresented payroll and the job classifications of 70 employees while being awarded at least 27 public works projects in Alameda, Contra Costa, San Francisco, San Mateo and Marin counties between 2003 and 2007. The investigation was a joint effort by the California Department of Insurance (CDI) Fraud Division, Employment Development Department (EDD), the U.S. Department of Labor, and Ung’s insurance company)
People v. Ghazey, No. A120722, 2009 WL 4353304 (Cal. Ct. App. Dec. 2, 2009), (Defendant, who owned a temp agency, was convicted of making false statements to the State Compensation Insurance Fund, in order to reduce workers compensation insurance premiums; the Court of Appeal affirmed the conviction)
People v. Peebles, 3 Cal. WCC 718 (Cal. Ct. App. 2009), (Defendants, husband and wife, were convicted of several counts each of workers’ compensation insurance fraud, unemployment insurance fraud, and one count of conspiracy to commit insurance fraud. The Court of Appeal affirmed the conviction)
Orange County Office of the District Attorney, Remarks by District Attorney Tony Rackaukas: Premium Insurance Fraud (April 30, 2009), (Announcing arrest of couple on 106 felony counts arising out $38m workers compensation premium fraud committed through their roofing and contracting business, the largest such fraud case in California history at the time)
People v. Rodriguez, No. F048461, 2006 WL 1532427 (Cal. Ct. App. June 6, 2006), (Prosecution appealed dismissal of case against the defendants for workers compensation and unemployment insurance fraud; case was dismissed because it was time barred; Court of Appeals affirmed the dismissal)
COLORADO [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Colo. Rev. Stat. Ann. § 8-72-114 (2012); see also Colorado Employment Security Act 2011, Colorado Dept. of Labor & Employment, Unemployment Insurance Program, (Requiring payment of back premiums plus in cases of “erroneous” misclassification; “willful” misclassifications can be punished by a fine of up to $5,000 for a first violation and up to $25,000 for subsequent violations; in addition, if a contractor has had at least two violations the government may disqualify it for up to two years from receiving government contracts)
STATE AGENCY REPORTS AND MATERIALS
Colorado Department of Employment & Labor, Unemployment Insurance, Employee Misclassification, (last visited Nov. 7, 2012) (Summarizing Colorado’s 2009 misclassification law tasking the state Unemployment Insurance Program with accepting and investigating complaints of misclassification, as well as providing advisory opinions upon request to employers seeking advice on the proper misclassification of workers)
Colorado Department of Employment & Labor, Unemployment Insurance, Unemployment Fraud, (Briefly describing the UI Department’s activities to investigate claimants or employers when any kind of UI claim is paid based on fraudulent information)
Colorado Department of Labor and Employment, Misclassification of Employees as Independent Contractors Annual Compliance Report (June 2, 2011), (Pursuant to House Bill (HB) 09-1310, the Colorado Department of Labor was required to submit a report in 2011 summarizing misclassification enforcement efforts since the misclassification bill was passed in 2009. It found that between June 2009 and December 2010, 14.2 percent of workers in Colorado were misclassified with an estimated $744,359 in underpaid unemployment premiums and interest; estimated financial impact to the state included $167 million loss in income tax revenues annually)
US Labor Department, Press Release: Colorado Department of Labor and Employment Partner to Reduce Misclassification of Employees as Independent Contractors (Dec.5, 2011), (Press release announcing signing of memorandum of understanding between Colorado and US Department of Labor to share information in order to reduce the practice of employee misclassification in Colorado)
CONNECTICUT [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
S.B. 385, An Act Concerning Owner Operators in the Motor Carrier Industry (Apr. 18, 2012) (Applying the independent contractor standard to owner/operators in the motor carrier industry: not yet approved--sent to Joint Committee on Labor and Public Empoyees)
Conn. Gen. Stat. Ann. § 31-288(g) (2012), (Prohibiting knowing misclassification for the purposeof paying lower workers compensation premiums is guilty of a class D felony and subject to a stop work order issued by the Labor Commissioner in accordance with Conn. Gen. Stat. § 31-76a. (2012))
Conn. Gen. Stat. Ann. § 31-76a (2012), (Setting out the powers of the Labor Commissioner to investigate complaints of nonpayment of wages or misclassification through inspections of work sites, records, issuance of subpoenas and upon determination that a violation has occurred, issue stop work orders and other penalties as set out under Conn. Gen. Stat. Ann. §31-288 or §31-69a.))
Conn. Gen. Stat. Ann. § 31-69a (2012), (Imposing a $300 fine for each day that an instance of misclassification is ongoing and imposing additional penalties for employers who have already been issued a “stop-work order” by the state or who have also violated the wage and hour laws)
INTERAGENCY TASK FORCE MATERIALS
Conn. Gen. Stat. Ann. § 31-57h (2012) (establishing a misclassification task force, referred to in the statute as a “joint enforcement commission,” composed of Labor Commissioner, the Commissioner of Revenue Services, the chairperson of the Workers' Compensation Commission, the Attorney General and the Chief State's Attorney; required to meet no less than four times each year, coordinate in civil prosecutions and report annually to the Governor and General Assembly on its activities)
Connecticut Department of Labor, Joint Enforcement Commission for Worker Misclassification, (last visited Nov. 18, 2012) (website of the joint Enforcement Commission for Worker Misclassification, including FAQs, complaint form, annual commission reports and GAO report on misclassifications)
State of Connecticut, Joint Enforcement Commission (JEC) on Employee Misclassification, Annual Report 2011, (Second annual report on the activities of the JEC, including meetings of the Commission and Advisory Board, enforcement accomplishments/data and future planned activities)
DELAWARE [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Delaware Workplace Fraud Act, Del. Code Ann. tit. 19, §§ 3501-3515 (2012), (Imposing a civil penalty between $1,000 and $5,000 for each improperly classified employee. An employer found to have violated the classification laws twice in a two-year period must pay an additional $20,000 fine and may be disbarred from government contracts for up to 5 years; the statute imposes additional, higher fines for creating a corporation for the purpose of evading the classification laws, aiding and abetting, or refusing to comply with a request from the state for books and records)
DE H.B.222, Amendment to Workplace Fraud Act (Signed into law July 12, 2012), (Requiring that the Department of Labor publish, on its website, the names of employers who have violated the Workplace Fraud Act by misclassifying an employee as an independent contractor or otherwise, found at: )
STATE AGENCY REPORTS AND MATERIALS
State of Delaware, Office of Labor Law Enforcement, Workplace Fraud Act Violators List, (List of employers that were found by final determination to have violated 19 Del.C. Ch. 35; employers' names to remain posted for period of three years from the date of final determination)
State of Delaware, Office of Labor Law Enforcement, Workplace Fraud, (last visited Nov. 18, 2012) (Agency website providing information on the Workplace fraud Act, including attendant regulations, violators list and notice of independent contractor or exempt status)
DISTRICT OF COLUMBIA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
D.C. B.19-0169, Workplace Fraud Amendment Act of 2011 (pending), (Applicable only to the constructions services industry, prohibits misclassification, establishes presumption of employer-employee relationship, provides for authority of the executive branch to launch investigations of alleged misclassification and levy penalties of up to $5000 for each employee improperly classified and for retaliation taken against one who complains of or alleges misclassification)
AGENCY REPORTS AND MATERIALS
The District of Columbia Department of Employment Services, Employers' Workers' Compensation Insurance Coverage Verification, (last visited Nov. 27, 2012) (Searchable database of employer maintenance of workers' compensation insurance coverage, allowing searches by employer name or Federal Employer Identification Number)
FLORIDA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Florida H.B. 1277, amending Fla. Stat. §§ 560.103- 560.144 (2012), (Aiming to reduce money services business facilitated workers’ compensation fraud by increasing regulation of check cashing stores or any "payment instrument seller, foreign currency exchanger, check casher, or money transmitter")
Fla. Stat. §§ 560.103- 560.144 (2012),
STATE AGENCY REPORTS AND MATERIALS
Florida Office of Insurance Regulation, A Report by the Money Service Business Facilitated Workers’ Compensation Fraud Work Group (2011), (Analyzing the extent of worker’s compensation premiums fraud in Florida and providing recommendations for regulatory reform as well as prosecutorial strategies based on findings)
Florida Department of Financial Services, Money Service Business Workers’ Compensation Fraud Work Group Website (2011), (including diagram, powerpoints, press releases etc., related to Money service Business Facilitated Workers’ Compensation Fraud Work Group)
CASE MATERIALS
WorkCompWire, FL CFO and Broward Sherriff Announce Additional Arrest in ‘Operation Dirty Money’ (August 26, 2012), (Describing additional arrest for an individual charged with 29 counts of money service business violations relating to workers’ compensation fraud under “Operation Dirty Money”)
Workers’ Compensation Institute, ‘Operation Dirty Money’ Nets Florida Workers’ Compensation Cheats (July 30, 2012), (Describing the arrest of several individuals in Florida accused of workers’ compensation fraud and money laundering through “Operation Dirty Money” investigation conducted by the state’s Workers’ Compensation Fraud Task Force)
Florida Division of Insurance Fraud, Probable Cause Affidavit, Request for Arrest Warrant, (July 23, 2012)
Rue & Ziffra, PA, Florida Construction Company President Arrested for Workers’ Compensation Fraud (April 11, 2012) (Describing the arrest of a company head charged with falsifying payroll material)
HAWAII [back to top]
STATE AGENCY REPORTS AND MATERIALS
Contractors Suspended Under Chapter 104, Hawaii Revised Statues (Dec. 18, 2012), http://labor.hawaii.gov/wsd/prevailing-wages-on-public-works/contractors-suspended-under-chapter-104-hawaii-revised-statutues/
Hawaii Dept. of Industrial Relations Wage Standards Division,Frequently Asked Questions About Chapter 104, Hawaii Revised Statues: Wages and Hours of Employees on Public Works Law, (March 2009), http://labor.hawaii.gov/wsd/files/2013/01/eH104-2Rev03-09.pdf
Nelson B. Befitel, Memorandum No. WSD-2, State of Hawaii Dept. of Industrial Relations (April 5, 2006), http://labor.hawaii.gov/wsd/files/2013/01/MemoWSD-2-flaggers_trafficdir_pubwks.pdf (noting that payment of prevailing wages on public works projects applies to workers engaged in traffic control in connection with such a project)
Nelson B. Befitel, Memorandum No. WSD-1A, State of Hawaii Dept. of Industrial Relations (Dec. 29, 2006), http://labor.hawaii.gov/wsd/files/2013/01/MemoWSD-1A_rev1-10-07surveyors.pdf (detailing the type and purpose of work that qualifies an employee on a public works project to prevailing wages under Chapter 104 HRS)
ILLINOIS [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
IL H.B. 4788, Unemployment Insurance Act (Mar. 30, 2012), (Amends the Unemployment Insurance Act and makes a technical change concerning independent contractors; not yet passed—referred to House Committee on Rules)
IL S 1851, Amendment to Employee Classification Act (Mar. 18, 2012), (Amending the Employee Classification Act to provide that the term employment does not include services performed by an individual as an operator of a truck, truck-tractor, or tractor if certain specified conditions are met.Not yet passed—referred to Senate Committee on Assignments)
820 Ill. Comp. Stat. Ann. 185/40 (West 2012), (Imposing a civil penalty for all misclassification violations, regardless of intent, of up to $1,500 for a first-time violation and up to $2,500 per subsequent violation in a five-year period)
820 Ill. Comp. Stat. Ann. 185/45 (West 2012), (Doubles the amount of the penalties for willful violations and allows misclassified employees themselves to sue for punitive damages up to the amount of the penalties in § 40. Willful violations are also treated as criminal misdemeanor offenses)
820 Ill. Comp. Stat. Ann. 185/42 (West 2012), (Disbarring repeat offenders from government contracts for a period of four years)
STATE AGENCY REPORTS AND MATERIALS
Illinois Dept. of Employment Security, UI Fraud by Employers, (Describing unemployment insurance fraud by employers and providing information for submitting complaints)
Illinois’ Department of Labor, Illinois Department of Labor Employee Classification Act, (last visited Nov. 18, 2012) (Fact sheet explaining the provisions and application of the state's Employee Classification Act, effective January 1, 2008)
INDIANA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Ind. Code Ann. § 22-2-15-2 (2012), (Requiring Indiana’s Department of Labor to develop guidelines to, among other things, provide remedies for workers fired in retaliation for instituting complaints about misclassification)
STATE AGENCY REPORTS AND MATERIALS
Indiana Department of Labor, Report to Pension Management Oversight Commission on Employee Misclassification, (Sept. 29, 2010) (Presenting a set of recommendations for regulators and prosecutors regarding employee misclassification based on investigatory findings, but recommending limited legislative change)
Indiana Departments of Workforce Development, Labor, Revenue, and the Workers’ Compensation Board, Worker Misclassification in Indiana, (Nov. 8, 2010) (Subsequent report, filed by a number of Indiana agencies on the same issue, also recommending no additional legislative action in the state)
IOWA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
IA H.B. 551, Department of Workforce Development Amendment (Mar. 9, 2011), (Providing that if the Department of Workforce Development finds that an employer willfully failed to pay any contribution for state unemployment compensation with intent to defraud the department, and that the failure to pay by the employer involved the misclassification of an employee's wages on a federal 1099 record, for any subsequent finding by the department of such a failure to pay by that employer involving the misclassification of an employee's wages on a federal 1099 record; Not yet approved—in House Committee on Labor)
INTERAGENCY TASK FORCE MATERIALS
Iowa Workforce Development, Iowa Misclassification Task Force 2nd Report (Dec. 30, 2010), (setting out the implementation of 2008 recommendation by the Task Force, and the activities and accomplishments of enforcement, education, information-sharing efforts by the state Workforce Development Misclassification Unit)
Elisabeth Buck et al., Misclassification Task Force Report to Governor Chet Culver (Dec. 17, 2008), (Defining employee misclassification, describing its impacts on the state, the activities of the Task Force and making six recommendations to Governor, including committing increased resources to enforcement, public education, review regulations applicable to interagency information sharing, and changing statutory definitions)
LexisNexis: Insurance Law Center, Iowa Governor Creates Task Force on Employee Misclassification (2008) (Reporting on Iowa’s 2008 creation of an inter-agency task force to investigate employee misclassification, including delegates from the Department of Labor, Economic Development, Workforce Development, and the Governor’s Office, based on Governor’s orders)
STATE AGENCY REPORTS AND MATERIALS
Iowa Workforce Development, Misclassification of Iowa Workers, (last visited Nov. 18, 2012) (Describing rules and penalties applicable to misclassification in Iowa, its impacts, frequently asked questions, complaint process, with links to a variety of related materials, including misclassification appeals decisions, seminars, the state's task force, contractor registration and more)
Iowa Workforce Development, Iowa's Contractor Law - Registration and Bonding, (last visited Nov. 18, 2012) (Setting out Iowa law requiring "construction contractors" to register with the Iowa Division of Labor, and providing links to the state's online registry of contractors, what is need to register, relevant statutes and regulations, and licensing requirements in the state)
Iowa Workforce Development, Misclassification Appeal Decisions, (last visited Nov. 18, 2012) (Listing and linking to decisions by administrative law judge in review of a determination of an employer-employee relationship or independent contractor relationship by IWD Unemployment Insurance Tax Bureau staff)
Iowa Dept of Revenue, Employers: Do you have Employees of Independent Contractors? (2009), (Disseminating information to employers in order to aid in distinguishing employees from independent contractors under Iowa state law)
KANSAS [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Kan. Stat. Ann. § 44-769 (2012), (Requiring the Department of Labor to issue yearly reports regarding the amounts of misclassification investigations and violations. Since this law was passed in 2011, the Department of Labor should have issued at least one report but I wasn’t able to locate it)
STATE AGENCY REPORTS AND MATERIALS
Kansas Department of Revenue, Misclassification of Workers, (last visited Nov. 18, 2012) (Agency website briefly describing misclassification and linking to complaint form)
CASE MATERIALS
Hill v. Kan. Dep’t of Labor, Div. of Workers Comp., 248 P.3d 1287 (Kan. 2011) (Finding that where a cab company “knowingly and intentionally failed to procure workers compensation insurance” for its cab drivers and Kansas Department of Labor found that the drivers were employees rather than independent contractors and imposed, KDOL was authorized by statute to impose either no civil penalty or a penalty of $25,000, but no amount in between)
KENTUCKY [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
KS S.B. 77, Act Relating to Employee Misclassification (Feb. 27, 2012), (Defining person, contractor, prime contractor, and subcontractor; specifies the Department of Revenue as the determining authority in issues related to the classification of a person as an employee or independent contractor; defines characteristics of an independent contractor, to stipulate that a prime contractor is not responsible for a subcontractor's misclassification of independent contractors as employees; not yet approved--Sent to House Committee on Appropriations and Revenues)
LOUISIANA [back to top]
TASK FORCE MATERIALS
Thomas McCormick, Louisiana Department of Justice Insurance Fraud Chief, Overview of Louisiana Insurance Fraud Task Force, (Explaining the role, procedures, and statutes employed by the Louisiana Insurance Fraud Task Force)
Louisiana Insurance Fraud Task Force, 2010 Joint Legislative Report, (Further clarifying group participation and procedures regarding the Louisiana task force)
STATE AGENCY MATERIALS
U.S. Department of Labor, Partnership Agreement between the United States Department of Labor, Wage and Hour Division, and Louisiana Workforce Commission (Feb. 23, 2012), (Agreement between Federal employment agency and Louisiana state agency, outlining respective jurisdiction and planning partnership regarding employment law compliance, including employer payroll fraud)
Louisiana Department of Insurance Fraud Section Procedures, 2011 Filing & Compliance Section (August 12, 2011), (Department of Insurance document explaining the role and procedures of its Fraud Section’s procedures, including reference to employer payroll fraud)
CASE MATERIALS
LA Attorney General, Attorney General’s Office Accepts Guilty Plea in Lafayette Businessman Fraud Case (May 4, 2011) (Announcing guilty plea secured by Louisiana AG for workers compensation fraud based on investigation by state Insurance Fraud Task Force; employer received 2-year suspended sentence and was required to pay $200,000 in restitution)
MAINE [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Me. Rev. Stat. tit. 39-A, §105-A (2012), (Establishing presumption of employee status for workers on constructions sites, requiring insurer referral upon good faith suspicion of fraud, providing authority to issue penalties and stop-work orders against violators and requiring the submission of insurance information by employers working on certain public works projects)
Me. Rev. Stat. Ann. tit. 26, § 591-A (2012), (Imposing penalties between $2,000 and $10,000 for knowing or intentional misclassification per violation. [Note: This law was passed only this year and will not take effect until December 31, 2012.])
Me. Rev. Stat. tit. 39-A, §105, (Providing for worker, employer or insurance carrier to seek a predetermination on employment status of an individual worker from state Workers' Compensation Board)
ME H 960, Independent Contractor Definition, (Signed into law Apr. 18, 2012), (Standardizing the definition of independent contractor for employment security law and workers' compensation law; states penalties for the misclassification of a worker as an independent contractor; requires two reports on the implementation of the new definition, found at: )
ME H.B. 1064, Wage Law Enforcement, (May 11, 2011), (Defines "employee," "employer" and "independent contractor" for the purposes of the wages and medium of payment provisions of the labor laws in order to prevent misclassification of employees and their exclusion from wage law protection; strengthens notification and reporting requirements; includes shareholders' liability to protect employees who are hired by corporations that use bankruptcy law to evade payment)
ME S.B. 437, Independent Contractor Laws, (Signed into law June 10, 2011), (Modifies the laws regarding status as an independent contractor; makes changes to provisions concerning unemployment compensation; directs the Commissioner of Labor to convene a stakeholder group to develop an employment test to be used in the administration of unemployment compensation law, workers' compensation law and programs of the Department of Labor, Bureau of Labor Standards to determine whether a person is an employee or independent contractor)
ME S.B. 332, An Act Concerning Trucking and Messenger Courier Industries, (March 15, 2011), (Establishing a set of factors to determine whether an individual engaged in the business of freight transportation or courier and messenger services is an employee or an independent contractor for purposes of the workers' compensation laws)
INTERAGENCY TASK FORCE MATERIALS
An Order Abolishing the Joint Enforcement Task Force on Employee Misclassification (Jan. 20, 2011), (abolishing Joint Enforcement Task Force on Employee Misclassification, itslef created by executive order, as an "extra layer of bureaucracy")
Laura Fortman, Task Force Chair and Commissioner, Maine Department of Labor, Annual Report of the Joint Enforcement Task Force on Employee Misclassification (Feb. 25, 2010), (Reporting findings made by Maine’s task force on employee misclassification as well as reviewing the task force’s actions over the previous year, and issuing prescriptive recommendations for future enforcement)
Maine Task Force on Employee Misclassificiation, Independent Contractor? Or Employee? (Mar. 2010), (Brochure issued by the Maine task force on Employee Misclassification, providing information for employers regarding classification of workers)
Governor John E. Baldacci, Executive Order, An Order Establishing the Joint Enforcement Task Force on Employee Misclassification (Jan. 14, 2009), (Creating task force designed to combat employee misclassification in Maine via Governor’s executive order)
STATE AGENCY REPORTS AND MATERIALS
Maine Department of Labor, Worker Misclassification, (last visited Nov. 18, 2012) (Providing general information on the relevant state law and standards for determining employment status, impacts of misclassification, and complaint submission mechanism)
NGO MATERIALS
Françoise Carré, Ph.D. & Randall Wilson,The Social and Economic Costs of Employee Misclassification in the
Maine Construction Industry,Construction Policy Research Center Labor and Worklife Program, Harvard Law School and Harvard School of Public Health (2005), (Documents the dimensions of misclassification and its implications for tax collection and worker compensation insurance)
MARYLAND [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
Md. Code Ann., Labor and Employment § 3-909 (West 2012), (Imposing a penalty of up to $5,000 per employee for knowingly misclassifying. It also allows the state to double the penalty if the employer is a repeat offender, and quadruple the penalty if the employer has violated the statute three or more times. Finally, the statute allows the state to potentially impose additional restitution payments to misclassified employees)
MD H.B. 309, Independent Contractor Act (withdrawn Mar. 22, 2012), (Defining "independent contractor" as an individual who is not an employee for purposes of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act, based on application of the 20 factors set forth in a specified Internal Revenue Service Revenue Ruling)
MD H.B. 734, Independent Contractor Registry (withdrawn Mar. 24, 2012), (Requiring the Department of Labor, Licensing, and Regulation to develop and maintain an Independent Contractor Registry; authorizes an individual who performs construction services or landscaping services as an independent contractor to register with the Registry; establishes that work performed by an individual registered with the Registry is not presumed to create an employer-employee relationship for the purposes of specified provisions related to workplace fraud, found at: )
MD H 1364, Workplace Fraud Act (signed into law May 2, 2012), (Establishes an exception for an employer that produces specified documents for inspection to the presumption that an employer-employee relationship exists for purposes of the Workplace Fraud Act; authorizes an employer to provide copies of records; alters the number of days within which an employer is required to product records; alter the requirement that a public body withhold funds from an employer; relates to violations under the act)
MD S 600, Act Concerning Department of Labor, (withdrawn Mar. 21, 2012), (Requiring the Department of Labor, Licensing, and Regulation to develop and maintain an Independent Contractor Registry; authorizes an individual who performs construction services or landscaping services as an independent contractor to register with the Registry; establishes that work performed by an individual registered with the Registry is not presumed to create an employer-employee relationship for the purposes of specified provisions related to workplace fraud)
MD S 1005, Workplace Fraud Act, (withdrawn Mar. 22, 2012),(Establishing an exception for an employer that produces specified documents for inspection to the presumption that an employer-employee relationship exists for purposes of the Workplace Fraud Act; provides for a presumption, under specified circumstances, that an individual working for remuneration is an independent contractor under specified circumstances)
INTERAGENCY TASK FORCE MATERIALS
Maryland Department of Labor, Licensing and Regulation, Workplace Fraud Task Force, (Describing establishment of state Joint Enforcement Task Force on Workplace Fraud, listing Task Force Annual Reports and providing link to complaint form
Annual Report of the Joint Enforcement Task Force on Workplace Fraud (2011), (Most recent annual report, for the year 2011, of the Maryland Joint Enforcement Task Force on Workplace Fraud; sets out background on workplace fraud, Task Force accomplishments, Task Force member agency individual reports, administrative and legal barriers and next steps and goals for 2012 )
MASSACHUSETTS [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Mass. Gen. Laws ch. 149, § 148B(d) (2012), (Establishing presumption of employee status and providing for penalties against employers determined to have misclassified workers based on a three-part test described in subsection (a) of the same section)
Mass. Gen. Laws ch. 149, § 27C (2012), (More general provision imposing criminal penalties of up to $25,000 and a year in prison for willful or repeated violations and $10,000 and six months for unintentional violations, along with a slew of other remedies like civil sanctions and disqualification from eligibility for government contracts)
Mass. Gen. Laws ch. 152, § 14, (Imposing penalties of up to five years in prison and $10,000, is also applicable if the misclassification affected workers’ compensation claims)
INTERAGENCY TASK FORCE MATERIALS
Executive Order No. 499: Establishing a Joint Task Force on the Underground Economy and Employee Misclassification, (Creating joint task force as mechanism for enhancing interagency cooperation, information sharing, and the prosecution of employers who fail to pay required wages, carry workers' compensation insurance, comply with health, safety and licensing requirements, or pay income taxes and payroll taxes that fund unemployment insurance, disability insurance, and Medicare and Social Security benefits)
MA Department of Labor and Workforce Development, Joint Enforcement Task Force on the Underground Economy and Employee Misclassification: Standard Operating Procedure, (describing standardized conduct of all field actions by the Governor's Joint Enforcement Task Force on the Underground Economy and Employee Misclassification's Joint Action Strike Team)
Executive Office of Labor and Workforce Development, Joint Enforcement Task Force on the Underground Economy and Employee Misclassification 2011 Annual Report (2011), (Report on the activities of the Joint Task Force, including data on recovered funds, results of referrals and cooperative oversight, future goals, and multi-state and federal cooperation)
STATE AGENCY MATERIALS
Amicus Curiae Brief of the Commonwealth of Massachusetts, Awuah V. Coverall North America, SJC 10829 (Mass.), (Brief micus curiae submitted by MA Attorney General in support of Appellants/employees regarding several issues including whether, under Massachusetts law, a misclassified employees damages include costs an employer typically must bear, whether an employer may withhold wages if employer and employee agree that wages are not earned until customer submits payment and whether an employer and employee may agree that an employee will pay some of the cost of workers' compensation insurance normally paid by the employer)
Amicus Curiae Brief of the Commonwealth of Massachusetts, Somers v. Converged Access, Inc., SJC 10347 (Mass.), (Brief amicus curiae submitted by Massachusetts Attorney General in support of Appellant/worker addressing whether an employer could defend against a claim of misclassification on the grounds that Appellant/worker would have earned less had he been classified as an employee, such that no net damages resulted from employer's violation)
Massachusetts Office of the Attorney General, An Advisory from the Attorney General’s Fair Labor Division on M.G.L. c. 149, s. 148B 2008/1, (Providing guidance as to the purpose of Mass. General Laws Ch. 159, Section 148B, which establishes three-part A-B-C test for determining employee status and placing burden of proof on employer to establish independent contractor status)
CASE MATERIALS
Awuah v. Coverall North America, Inc., 460 Mass. 484 (2011), (Holding that an employer and employee may not agree that employee will bear the cost of some portion of workers' compensation or other work-related insurance coverage through deduction of some or all of those costs fromt he employee's wages)
Somers. v. Converged Access, Inc., 454 Mass. 582 (Mass. 2009), (Finding that the amount of damages owed to individual worker underM.G. L. c. 149, § 150 for having been misclassified as an independent contractor rather than an employee, in violation of M.G.L. c. 149 § 148B,
may not be reduced by subtracting the compensation the individual worker obtained as an independent contractor from
the compensation the plaintiff would have received had he been hired as an employee)
Press Release: Watertown Roofing Company and its Owners Plead Guilty and Are Sentenced for Labor Violations, (Jan. 10, 2012), (Press release announcing guilty plea and sentencing of roofing controcting business and owners for failing to disclose millions of dollars in misclassified subcontractor payroll and pay the prevailing wage; investigation was cooperative effort between Attorney General Martha Coakley’s Office, the Executive Office of Labor and Workforce Development, the Massachusetts Insurance Fraud Bureau, and the Governor’s Joint Enforcement Task Force on the Underground Economy and Employee Misclassification)
David Riley, Guilty Plea in Payroll Fraud Case, MetroWest Daily News (Jan. 16, 2010) (Defendants (Paul McKunes and M&M Equipment Services) failed to report $800,000 in payments to employees and pleaded guilty to unemployment insurance fraud, failure to withhold state income tax, workers’ compensation fraud larceny; the Insurance Fraud Bureau of Massachusetts referred the case to the Attorney General's Office in September 2008 after an investigation into M&M's payroll and an insurance claim by an employee not on the payroll)
NGO MATERIALS
Françoise Carré, Ph.D. & Randall Wilson,The Social and Economic Costs of Employee Misclassification in Construction, Construction Policy Research Center Labor and Worklife Program, Harvard Law School and Harvard School of Public Health (Dec. 17, 2004), (Documents the dimensions of misclassification n the Massachusetts construction industry and its implications for tax collection and worker compensation insurance)
MICHIGAN [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
M.I. S.B. 1012, Worker’s Compensation (Mar. 8, 2012), (Establishing criteria to determine employee and independent contractor status for worker's compensation coverage in trucking and messenger courier industries.Not yet passed—Introduced and referred to Senate Committee on Economic Development)
INTERAGENCY TASK FORCE MATERIALS
Stanley "Skip" Pruss & Susan Corbin, Report to Governor Jennifer M. Granholm, Interagency Task Force on Employee Misclassification (July 1, 2009), (Detailing the activities of the Task Force including a series of five public hearings and seven recommendations for addressing employee misclassification, in particular legislative changes)
MINNESOTA [back to top]
LEGISLATIVE MATERIALS
Nick Busse, Employee Misclassification Bill Passed, Minnesota House of Representatives Public Information Services (April 28, 2012), (Announcing Minnesota House of Representatives passage of bill clarifying definition of an independent contractor and instructing the Department of Labor and Industry to implement of a pilot project to register businesses performing construction services in the state)
Minn. Stat. §181.722 (2012), (Prohibits an employer (1) from misrepresenting to any government unit the nature of its employment relationship with its employees and (2) from requesting or requiring an employee to enter into an agreement that results in misclassification; provides that the nature of the employment relationship is determined by the tests used under applicable workers’ compensation and unemployment insurance laws; provides civil remedy to worker injured by a violation of the section)
Minn. Stat. Ann. § 181.723 (2012), (Defining the employer-employee relationship, independent contractor status, limit application of the law to construction businesses, establish a pilot project to register those providing construction services int he state, and prohibit misclassification of employees as independent contractors)
Minn. Stat. Ann. § 326B.082, subdivision 7 (West 2012), (monetary fines up to $10,000 are allowed for violation of misclassification, with additional fines following if the violation is not corrected)
INTERAGENCYTASK FORCE MATERIALS
Advisory Task Force on Employee Misclassification, Report to the 2011-2012 Biennium, Eighty-Seventh Legislature (May 13, 2011), (Report to the legislature by the Advisory Task Force, including a description of the Task Force, background on 2007 report by Legislative Auditor on Employee Misclassification, background on Independent Contractor Exemption Certificate, recommended legislative changes, and comments of individual Task Force members and organizations)
STATE AGENCY REPORTS AND MATERIALS
Minnesota Department of Labor & Industry, (Explaining new law requiring registration of some contractors and providing portal to online registration process)
Minnesota Department of Labor & Industry, Classification Clarification Request (form), (Form for requesting clarification on employment status prior to commencement of work on a project to which prevailing wage law applies)
Minnesota Department of Labor & Industry, The Workers' Compensation Liability of Contractors, (Detailing when a and how a contractor may protect themselves from workers' compensation liability, even where they do not believe they have employees required to be covered)
MISSOURI [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Mo. Ann. Stat. § 285.503 (2012), (defining "knowing misclassification" and providing attorney general with authority to investigate alleged or suspected violations)
Mo. Ann. Stat. § 285.506 (2012), (placing burden of proof on state to prove that an employer misclassified a worker)
Mo. Ann. Stat. § 285.515 (2012), (Establishing that an employer who knowingly misclassifies an employee is subject to penalties equal to $50 per day per worker, up to a maximum of $50,000)
STATE AGENCY REPORTS AND MATERIALS
Missouri Department of Labor & Industrial Relations, 1099 Fraud - Worker Misclassification, (last visited Nov. 18, 2012) (Agency website explaining employee misclassification, its consequences, and providing interactive tool for workers to determine their employment status and whether they may be improperly classified)
Missouri Department of Labor & Industrial Relations, Report Workers Misclassification Fraud, (last visited Nov. 30, 2012) (Providing basic information on workers' compensation fraud and mechanism/form for reporting fraud)
NGO MATERIALS
Michael P. Kelsay, James I. Sturgeon & Kelly D. Pinkham, The Adverse Economic Impact from Repeal of the Prevailing Wage Law in Missouri, University of Missouri - Kansas City (Dec. 2011) (concluding that Missouri' prevailing wage laws do not increase the cost of construction and that short and long-term effects of prevailing wage show positive and substantial impacts on construction workers, their families, other industry participants and their families, and state, county, and local revenue streams)
MONTANA [back to top]
CASE MATERIALS
Order Denying Petitioner's Motion for Summary Judgment and Granting Summary Judgment in Favor of Respondent, McCone Cty v. State of Montana, Workers' Comp. Bureau, WCC No. 2011-2843 (2012),
Montana Department of Justice, Press Release: Bullock Announces $2.3m Settlement with FedEx Ground (Oct. 20, 2010), (Announcing Montana AG's $2.3 million agreement with FedEx Ground over its failure to pay unemployment insurance on behalf of its drivers, who had been misclassified as independent contractors.
NEBRASKA[back to top]
STATUTORY AND LEGISLATIVE MATERIALS
Employee Classification Act, Neb. Rev. Stat. §§ 48-2901 - 2912 (2010), (provides for protection of workers in construction and delivery services from misclassification as subcontractors for the purposes of tax withholding, unemployment insurance and workers' compensation insurance benefits)
Neb. Rev. Stat. § 48-2907 (2012), (applies to construction and delivery workers and mandates that the Department of Labor impose a fine of $500 per misclassified worker for a first violation and of $5,000 per worker for each subsequent violation)
STATE AGENCY REPORTS AND MATERIALS
Nebraska Department of Labor, Employee Classification Act, (Introducing Employee Classification Act, with links to complaint forms, contractor registration, Internal Revenue Service, Nebraska Revenue Service and Nebraska Workers' Compensation Court websites)
NEVADA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Nevada Legislature Legislative Commission's Subcommitte to Study Employee Misclassification, Summary Minutes and Action Report (January 22, 2010), (Explanation of misclassification through legislative investigation, including analyzing economic effects, effects on workers’ rights, and the implications of possible legislative solutions), f
Legislative Counsel Bureau, Bulletin No. 11-07: Employee Misclassification (Jan. 2011), (Issuing recommendations for creation of task force as well as legislative goals for attacking misclassification, including instituting a private right of action for workers)
NEW HAMPSHIRE [back to top]
INTERAGENCY TASK FORCE MATERIALS
Task Force for the Misclassification of New Hampshire Workers (Web page for state Misclassification Task Force, including most recent Task Force Report, as well as prior Task Force reports, education materials for employers and employees (in both English and Spanish), and a link to the state's workers' compensation verification website
Second Report of the Joint Agency Task Force on Employee Misclassification Enforcement, (Sept. 1, 2012), (Describing action of the Task Force in previous year including sharing information, public education via website and radio, and future efforts)
NEW JERSEY [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
Construction Industry Independent Contractor Act, N.J. Stat. Ann. §§ 34:20-1 et seq., (Imposing penalties against misclassifying employers in the construction industry (penalties are subject to the decision of the Department of Labor and can include up to $5,000 per misclassified employee, disbarment from government contracts, and stop-work orders for subsequent violations)
Construction Industry Independent Contractor Act Regulations, N.J. Stat. Ann. §§12:65-1.1 et seq.,
N.H. H.B. 420, Registration for Independent Contractors (Signed into law June 7, 2012), (Clarifying the definition of employee and the criteria for exempting workers from employee status; redefining employee to include a person who holds himself or herself out to be in business for himself or herself or is registered with the state as a business and the person has continuing or recurring business liabilities or obligations)
STATE AGENCY REPORTS AND MATERIALS
Governor Jon S. Corzine, Exec. Order #96, (Established an “Advisory Commission” by executive order to develop recommendation for a comprehensive and strategic approach to the problem of employee misclassification in the construction industry)
CASE MATERIALS
State of New Jersey Office of the Attorney General, President of Now-Defunct Mercer County Construction Company Pleads Guilty to Stealing More than $450,000 from State of New Jersey and Insurance Company (Nov. 28, 2012), (New Jersey Attorney General news release reporting the guilty plea of a former construction company president to two counts of second degree theft by deception for stealing $450,000 by providing false and misleading information to the company’s worker compensation carrier)
NEW MEXICO [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
N.M. Stat. § 60-13-3.1(c), (Applies only to the construction industry, providing that an employer who willfully misclassifies employees is guilty of a misdemeanor punishable by a fine up to $5,000 and/or jail time of up to six months; additionally, subsection (d) provides that the state may also suspend or revoke a contractor’s license)
NEW YORK [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
The New York State Construction Industry Fair Play Act,N.Y. Lab. Law §§ 861 - 861F, (Provides for specific penalties for misclassification in the construction industry at N.Y. Labor Law § 861-e; this section imposes a civil fine of up to $2,500 for the first willful violation and up to $5,000 for every subsequent willful violation in a period of five years, and a criminal misdemeanor for a willful violation up to 30 days in jail and $25,000 for a first offense and 60 days/$50,000 for subsequent offenses; the statute also imposes additional penalties including disqualification from public contracts for up to five years)
N.M. H.B. 91, Employee Fair Classification Act (Jan. 18, 2012), (Creating presumptions regarding employee-independent contractor distinction, as well as creating causes of action for violation. Not yet passed—referred to House Committee on Rules and Order of Business)
INTERAGENCY TASK FORCE MATERIALS
New York Department of Labor, Unemployment Insurance, Employee Misclassification of Workers,
Annual Report of the Joint Enforcement Task Force on Employee Misclassification to Andrew M. Cuomo, Governor of New York (Feb. 1, 2012), (2012 Annual Report from the New York Joint Enforcement Task Force providing background as well as disseminating Task Force’s findings regarding employee misclassification for the 2011-2012 year)
Annual Report of the Joint Enforcement Task Force on Employee Misclassification to Andrew M. Cuomo, Governor of New York (Feb. 1, 2011), (2011 Annual Report from the New York Joint Enforcement Task Force providing background as well as disseminating Task Force’s findings regarding employee misclassification for the 2010-2011 year)
Annual Report of the Joint Enforcement Task Force on Employee Misclassification to Governor David A. Paterson, State of New York (Feb. 1, 2009), (2009 Annual Report from the New York Joint Enforcement Task Force providing background as well as disseminating Task Force’s findings regarding employee misclassification for the 2008-2009 year)
STATE AGENCY REPORTS AND MATERIALS
New York State Department of Labor, Construction Industry Fair Pay Act, (website providing summary of the Act, bill text and links to construction site posters and a fact sheet)
New York State Department of Labor, Unemployment Insurance: Employer Tax Fraud Activities, (last visited Nov. 18, 2012) ( (website providing summary of the various forms of Employer Tax Fraud as well as ways to report these activities)
CASE MATERIALS
In Re Body Elec. Corp. of Am., 933 N.Y.S.2d 411 (N.Y. App. Div. 2011) (Affirming Unemployment Insurance Appeal Board’s decision to assess employer additional unemployment insurance contributions as well as a fraud penalty on the basis that the employer had misclassified one of its employees as an independent contractor)
The New York County District Attorney's Office, Press Release: District Attorney Vance Announces Guilty Plea in Tax Case (Sept. 21, 2010), (Business owner pleaded guilty to one count of Offering a False Instrument for Filing in the First Degree, and one court of Criminal Tax Fraud in the Fifth Degree for filing false financial statements and underreporting payroll, which enabled him to underpay unemployment insurance and workers’ compensation insurance)
New York State Department of Labor, Press Release: Labor Department Enforcement Actions Against More Than Half of the Subcontractors on ‘The Province’ at RIT Project (June 8, 2010), (Enforcement sweeps revealed that half of the contractors working on a project at Rochester Institute of Technology were violating state labors laws, including misclassification of employees as independent contractors and failure to carry workers’ compensation insurance)
The New York County District Attorney's Office, Press Release: District Attorney Vance Announces Insurance Fraud Indictment (May 16, 2010), (Operator of a temp agency indicted for workers’ compensation insurance fraud)
Steven Greenhouse, State Sues Administrator of Workers Compensation, New York Times (Dec. 9, 2009), (Describing $405 million lawsuit against workers compensation administrator CRM holdings, which allegedly underestimated the workers' compensation liabilities of its employer clients, allowing CRM to charge artificially low premiums and undercut its competitors)
The New York District Attorney's Office, Press Release: District Attorney Morgenthau Announces Indictment of Contracting Firm for Defrauding Employees (Dec. 2, 2009), (Subcontractor omitted names of non-union employees from payroll records provided to NYCHA as part of project renovating buildings owned by NYCHA; Employer submitted sworn affidavits monthly that he was paying the prevailing wage even though he was not in fact doing so)
Suffolk County District Attorney's Office, Press Release: Suffolk DA arrests contractor for ignoring state taxes, workers comp premiums (Dec. 5, 2007), (Contractor submitted false documents to the New York State Workers Compensation Board)
DISTRICT ATTORNEY MATERIALS
District Attorney of Albany, Financial Crimes Unit, (last visited Nov. 19, 2012) (Website of the District Attorney of Albany Financial Crimes Unit, providing information on various forms of financial crimes as well as means of contacting the office to report fraudulent activities, including those relating to employer payroll fraud)
NORTH CAROLINA [back to top]
STATE AGENCY REPORTS AND MATERIALS
NC Industrial Commission, Fraud Investigations Section, (last visited Nov. 18, 2012) ( North Carolina Industrial Commission Fraud Investigations website, providing an explanation of the methods of that group, various fraudulent activities including those relating to employee misclassification, as well as means for reporting these activities)
INTERAGENCY TASK FORCE MATERIALS
State of North Carolina, Office of Governor Bev Purdue, Executive Order 125 (Aug. 22, 2012), (Transcript of the Executive Order establishing North Carolina’s Task Force on Employee Misclassification)
NORTH DAKOTA [back to top]
STATE AGENCY REPORTS AND MATERIALS
North Dakota Department of Labor, Independent Contractor Verification, (last visited Nov. 18, 2012) (North Dakota Department of Labor website explaining the distinction between independent contractors and employees in that state)
OHIO [back to top]
STATE AGENCY REPORTS AND MATERIALS
Ohio Attorney General Richard Cordray, Report of the Ohio Attorney General on the Economic Impact of Misclassified Workers for State and Local Governments in Ohio, (Feb. 18, 2009), (Ohio AG report on employee misclassification, including a state-by-state summary examining the prevalence of the issue and particular states’ responses)
CASEMATERIALS
Limousine, Charter and Tour, Ohio Limo Operator Ordered to Pay Restitution for Employee Misclassification (Nov. 7, 2012), (Operator of a limo service in Ohio is forced to pay restitution after pleading guilty to a crime related to employee misclassification)
Ohio Business Owner Convicted for Failure to Keep Workers Compensation Coverage, Claims Journal (Feb. 25, 2011), (Reporting conviction secured by Ohio Department of Workers Compensation against business owner for failing to maintain workers' compensation insurance coverage for her employees, resulting in $73,000 in past-due premiums)
Agreement for the Release and Exchange of Confidential Information Between the Ohio Department of Job and Family services and the Ohio Department of Taxation and the Ohio Bureau of Workers’ Compensation (2008-09), (Transcript of an agreement between two Ohio state agencies to freely exchange information for the purpose of confronting employee misclassification problem)
OKLAHOMA [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Oklahoma H.B. 2258, Okla. Stat. tit. 68, § 1708 (effective Nov. 1, 2012), (requiring all contractors bidding for a public project to show documentation for their workers, with 10% of the original bid being assessed as penalties if it is determined that the contractor intentionally misclassified employees as subcontractors)
OK House Passes Worker Misclassification Bill, WorkCompWire (March 22, 2012), (requiring all contractors bidding for a public project to show documentation for their workers, with 10% of the original bid being assessed as penalties if it is determined that the contractor intentionally misclassified employees as subcontractors)
OREGON [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Oregon H.B. 2815 (2009), (Establishing an Interagency Compliance network - including Departments of Justice, Revenue, Employment, consumer & Business Services, Burea of Labor & Industries and others - to gather and share information on misclassification and off-the-books pay; coordinate audits, enforcement, and classification determinations; engage in public outreach and other activities to address payroll and tax fraud)
Oregon Rev. Stat. 670.700 (2011),(statutory codification of H.B. 2815 (2009) and amending legislation)
STATE AGENCY REPORTS AND MATERIALS
Oregon.gov, Oregon's Independent Contractor Laws, (last visited Nov. 18, 2012) (Website for the state of Oregon outlining that state’s statutory system regarding independent contractors)
Oregon Independent Contractors: Worker Classification, (last visited Dec. 10, 2012) (Clarifying who is a contractor and providing notice to workers, industry-specific considerations, worker classification seminars, complaint submission mechanism and link to brochure "Employee or Independent Contractor?" in multiple languages).
Oregon Independent Contractors, Worker Misclassification, (last visited Nov. 18, 2012) (Website for the state of Oregon describing the issue of worker misclassification, providing information for employers regarding the employee/independent contractor distinction, and including a section where employees may report worker misclassification complaints)
Tom Byerley, Misclassification of Workers: Oregon's Approach, Unemployment Insurance Division, Oregon Employment Department, ( (Presentation from the Administrator of the Unemployment Division of the Oregon Employment Department describing Oregon’s statutory methods for confronting employee misclassification as well as an historical background of its approach to the issue)
CASE MATERIALS
Oregon Department of Justice, Press Release: Hillsboro Corporation and Its Owner Plead Guilty to Criminal Antitrust and Racketeering Charges, (July 29, 2011), (Article released by the Oregon Department of Justice explaining the guilty plea of a corporation and its owner in Oregon for a fraudulent scheme to induce the Oregon Employment Department to issue unemployment benefits to employees and force workers on prevailing wage jobs to return large percentages of their paychecks to him)
PENNSYLVANIA [back to top]
LEGISLATION AND STATUTORY MATERIALS
Construction Workplace Misclassification Act, 43 Pa. Stat. Ann. §§933.1-933.17, (Defining who classifies as an “independent contractor,” prohibiting misclassification, setting role of Secretary of Labor and Attorney General in enforcement and setting oout criminal and administrative penalties)
PA H.B. 2540, Commercial Carrier Industry Independent Contractors (Introduced July 2, 2012), (Providing for the criteria for independent contractors in the commercial carrier industry and for the powers and duties of the Department of Labor and Industry and the Secretary of Labor and Industry; imposes penalties)
CASE MATERIALS
Riley Yates, DA to Crack Down on ‘Independent’ Contracting in Construction, Of the Morning Call (Feb. 15, 2011), (Article describing Northhampton County DA’s plans to enforce Pennsylvania’s new Workplace Misclassification Act, which allows for criminal prosecution for misclassification)
RHODE ISLAND [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
R.I. Gen. Laws Ann. § 28-14-19.1 (West 2012) (In addition to other potential penalties including back taxes and lost wages, a misclassifying employer will be subject to fines between $500 and $3,000 per employee for a first offense, and up to $5,000 per employee for any subsequent offense. The penalties apply regardless of intent, but the statute notes that the state should take into account the good faith of the employer when determining the amount of the fine)
R.I. Gen. Laws § 9-1-53, (providing cause of action to individuals suffering damage as a result of a competitive bid for a contract by one knowingly classifying employees as independent contractors)
STATE AGENCY REPORTS AND MATERIALS
Rhode Island Department of Labor and Training, DLT to Launch Month-Long Effort to Combat Fraud (Oct. 27, 2011), (R.I. Department of Labor media advisory announcing public education campaign regarding employer fraud)
SOUTH CAROLINA [back to top]
CASE MATERIALS
Chavis v. Watkins, 180 S.E.2d 648, 649 (S.C. 1971) (defining who is an independent contractor under South Carolina common law)
SOUTH DAKOTA[back to top]
LEGISLATIVE AND STATUTORY MATERIALS
S.D. Codified Law § 6-1-11, (defining "employee" and "independent contractor")
STATE AGENCY REPORTS AND MATERIALS
South Dakota Department of Labor Regulation, Independent Contractor or Employee?, (Fact sheet distinguishing independent contractor status from employee status, applicable South Dakots law, and contact information for South Dakota Department of Labor)
TENNESSEE [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
Tenn. Code Ann. § 50-6-919 (2012) (Establishing Tennessee’s misclassification task force)
INTERAGENCY TASK FORCE MATERIALS
Tennessee Department of Labor and Workforce Development, Tennessee Employee Misclassification Advisory Task Force, (last visited Nov. 18, 2012) (Fact sheet setting out the concept of "employee" versus "independent contractor," summarizing relevant South Dakota law and providing contact for more information)
Employee Misclassification Advisory Task Force, 2012 Annual Report (Jan.30, 2012), (Annual report of Misclassification Task Force setting out legislative process, efforts and progess, administrative and legal impediments, impacts of misclassification, proposed legislative initiatives and recommendations)
CASE MATERIALS
Shelby County District Attorney General, Press Release: Grand Jury Indicts Memphis Business Owner for Workers’ Comp Fraud (Nov. 12, 2010), (Defendant underreported payroll in order to defraud workers’ compensation insurance providers)
TEXAS
STATE AGENCY MATERIALS
Texas Workforce commission, SUTA Dumping, (last visited December 4, 2012) (Describing State Unemployment Tax Act dumping, which is includes a number of practice by employers designed to minimize the unemployment insurance rate they pay, and Texas legislation to address the practice)
Texas Workforce Commission, Common Paymaster and Payrolling, (last visited Dec. 4, 2012) (Setting out texas Workforce Commission rules regarding payrolling and use of a common paymaster, which are terms used to describe a situation in which one employer reports the employees of another employer; the State of Texas does not allow combined reporting by related companies bc the Texas Unemployment Compensation Act is based on an tax experience rated system whereby each separate entity receives its own experience rate (Tax rate); Prohibiting “payrolling” prevents employers from transferring payroll to another account with a lower tax rate)
UTAH [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
Worker Classification Coordinated Enforcement Act, Utah Code Ann. § 34-47-101 et seq. (2012), (Establishing a misclassification task force known as the “Utah Worker Classification Enforcement Council”)
INTERAGENCY TASK FORCE MATERIALS
State of Utah Labor Commission, Workers Classification - Committee Overview, (last visited Nov. 18, 2012) (Website of the Worker Classification Enforcement Council, including committee membership, meeting agendas and minutes and audio, and annual reports)
STATE AGENCY REPORTS AND MATERIALS
Jody McMillan, Utah Chief of Contributions & Eileen Rivera, Field Audit Manager, Effective Methods to Detect and Deter Worker Misclassification, (Powerpoint presentation providing information on the Utah Unemployment Tax Division audit practices, activities of the Worker Classification Enforcement Council and the role of the Division of Occupational and Professional Licensing and Real Estate Division)
VERMONT [back to top]
STATUTORY AND LEGISLATIVE MATERIALS
H.647, An act relating to misclassification of employees to lower premiums for workers’ compensation and unemployment compensation, (Imposing penalties for a variety of misclassification violations and omissions)
INTERAGENCY TASK FORCE MATERIALS
State of Vermont Executive Department, Executive Order No. 08-12 (Sept. 8, 2012), Misclassification Task Force.pdf (Creating Governor's Task Force on Employee Misclassification)
STATE AGENCY REPORTS AND MATERIALS
State of Vermont Department of Labor, Fraud, (Webpage of Vermont Department of Labor on fraud, including how to report misclassification, review investigation outcomes, and check an employers' worker compensation coverage)
VIRGINIA [back to top]
LEGISLATIVE ANDSTATUTORY MATERIALS
Joint Legislative Audit and Review Commission, Review of Employee Misclassification in Virginia (June 2012), available at (Report on the status and consequences of employee misclassification in Virginia, the amount of revenue potentially lost to the State and to local governments, and recommended strategies for alleviating misclassification)
WASHINGTON [back to top]
STATE AGENCY REPORTS AND MATERIALS
Washington State Department of Labor and Industries, Partnering to Prevent Fraud and Abuse: 2012 Annual Fraud Report to the Legislature (Details the fraud prevention and compliance activities of the Washington State Department of Labor and Industry, including resources available to the Department, results of outreach, investigations and enforcement actions and the Dept.'s return on investment)
Doric Olson, Liz Smith et al., Underground Economy Benchmark Report: 2012 Report to the Legislature (joint report of the Washington State Department of Labor and Industries, Washington State Department of Revenue and Washington State Employment Security Department, detailing the agencies' joint and individual efforts to combat the underground economy, including instances of information-sharing, audits, delinquent premiums collected, infractions identified and outreach performed)
Doric Olson, Liz Smith et al., Underground Economy Benchmark Report: 2011 Report to the Legislature (joint report of the Washington State Department of Labor and Industries, Washington State Department of Revenue and Washington State Employment Security Department, detailing the agencies' joint and individual efforts to combat the underground economy, including instances of information-sharing, audits, delinquent premiums collected, infractions identified and outreach performed)
Washington State Department of Labor and Industries, Employer Fraud, Spotting the Red Flags, (Webpage of WA Department of Labor and Industries setting out tips for identifying employer fraud)
Washington State Department of Labor & Industries, Fraud Prevention and Compliance, (last visited Nov. 18, 2012) (Webpage describing Department of Labor and Industry activities to combat fraud, including definition of employer fraud, signs of fraud, mechanism for reporting newly hired workers and links to Department of Revenue, and Employment Security Department)
Washington State Department of Labor & Industries, Nailed: A Fraud Prevention and Compliance Blog, (Blog written by the Fraud Prevention and Compliance Program Manager at the Washington Department of Labor & Industries)
CASE MATERIALS
Washngton State Department of Labor & Industries, Press Release: Contractor pleads guilty to felony theft of sales tax, workers’ comp fraud (Oct. 29, 2009), (Contractor sentenced to 75 months in prison in part for failing to pay workers’ compensation premiums for his employees and then failing to pay restitution)
WISCONSIN [back to top]
LEGISLATIVE AND STATUTORY MATERIALS
Wisc Stat. § 103.06 (2011), (Worker misclassification compliance)