DOL Requests $46 Million for Worker Misclassification Enforcement

The Department of Labor (DOL) is requesting $46 million in the Fiscal Year 2012 budget to allow the agency to "redouble its efforts to combat worker misclassification."

Over the past couple of years, the DOL has been cracking down on employers who misclassify workers who should be W-2 employees as 1099 independent contractors. Last year, the agency hired 350 agents to investigate suspected misclassification.

The DOL plans to continue this push in FY 2012 by launching a new multi-agency Misclassification Initiative which is intended to do a number of things, including the following:

Provide grants to help states address worker misclassification within their unemployment insurance programs.
Create an incentive program that will reward states that successfully combat worker misclassification.
Provide the Wage and Hour Division (WHD) with over $15 million and 107 additional personnel to support an additional 3,250 msclassification investigations.

The take-away point here is that the DOL is not going to let up on misclassification enforcement. So if you know or suspect that a client is misclassifying employees as independent contractors, you may want to make them aware!

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.

Comment by Valentino Martinez on September 13, 2011 at 6:56pm: Debbie,

Good heads-up.

Misclassification of a worker happens "...when an employer improperly treats an individual as an independent contractor instead of as an employee. Because of this labeling, some employers attempt to avoid complying with unemployment insurance, workers’ compensation, social security, tax withholding, temporary disability, and minimum wage and overtime laws that protect workers. (http://www.labor.ny.gov/agencyinfo/MisclassificationofWorkers.shtm)

I also noticed with the delayering of the workforce over the past 20 years, approx. 3 employees do what 5 employee did five years ago. With such delayering the job titles stay the same but the workloads have increased. Kudos to employers who reclassifying those expanded jobs to allow for better compensation and job title, job description upgrades for employees now doing much more work in essential the same job they were in only a couple of years ago.

Comment by Sandra McCartt on September 14, 2011 at 10:35pm: There are thousands of people who would be delighted to be misclassified if they could just work. Let's beef up more regulation and see if we can eliminate more jobs.