United States Department of Labor, State Labor Regulators and Other Stakeholders Meet at Columbia Law School to Discuss Best Practices and Information Sharing to Prevent Unlawful Labor Practices
New York, September 19, 2011 – On August 17-18, the National State Attorneys General Program at Columbia Law School convened an informal meeting of state and federal regulators, academics and advocates to discuss improving law enforcement at both the state and federal levels regarding payroll fraud and misclassification.
The key goal of the meeting was to enhance cooperation between the federal government, states, worker advocates, and employers. The meeting was convened a month prior to the United States Department of Labor’s signing of memorandums of understanding with the IRS and with a number of state regulators to provide for information-sharing with the goal of leveling the playing field between employers who follow the law and those who do not.
Discussion at the meeting at Columbia Law School centered on enforcement of wage and hour laws and laws against misclassification/payroll fraud in the face of new employment models that challenge these laws. Unlawful misclassification is the practice of classifying “employees” as “independent contractors” to avoid making workers compensation, unemployment, tax and other lawfully-required payments, even though the workers are not truly “independent” and fit the traditional definition of “employee.” Payroll fraud includes the practice of paying wages “off-the-books” and can take a number of forms.
Employee misclassification and payroll fraud deprive workers of access to legal protections including the minimum wage, workers compensation and unemployment benefits and penalize the vast majority of employers who play by the rules; and deny states and taxpayers of much-needed revenue.
During the meeting, federal and state regulators, academics, and advocates discussed the myriad issues and obstacles they were facing in a time of tight budgets and high unemployment, and explored ways for all stakeholders to improve cooperation and the effectiveness of enforcement. Topics covered included the role of state attorneys general in enforcing labor laws, the use of information technology to improve enforcement, and cooperation with businesses to increase compliance.
 United States Department of Labor, Labor Secretary, IRS Commissioner Sign Memorandum of Understanding to Improve Agencies’ Coordination on Employee Misclassification Compliance and Education (Sept. 19, 2011), available at http://www.dol.gov/opa/media/press/whd/WHD20111373.htm