Feds Target Independent Contractor Misclassification

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Citing a desire to minimize losses in contributions to unemployment insurance funds, protect workers' rights, and "level the playing field" for employers that abide by the law, the United States Department of Labor's (DOL's) 2012 proposed budget reflects aggressive plans to target the misclassification of employees as independent contractors. The initiatives included in the proposed budget represent the latest development in a series of efforts by the DOL to curb worker misclassification. Of perhaps greatest significance is the DOL's request for an additional $46 million to support a multi-agency effort to attack independent contractor misclassification. Among the participating agencies are the Wage and Hour Division (WHD), the Office of Federal Contract Compliance Claims (OFCCP), and the Occupational Safety and Health Administration (OSHA).

The DOL's budget request underscores the fact that identifying and eradicating the misclassification of employees as independent contractors continues to be a significant policy objective for the agency, and serves to put employers on notice that they fail to correctly classify employees at their peril. Indeed, the latest budget initiative follows recent WHD efforts to hire 250 new wage and hour investigators, as well as the DOL's efforts to create a joint Labor-Treasury misclassification initiative focused on detecting, investigating, and prosecuting employers with misclassified workers.

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