Three New Programs to Encourage Worker Reclassification Unveiled

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Within the last few weeks, the Internal Revenue Service (“IRS”), the U.S. Department of Labor (“DOL”) and 11 states have joined forces to launch a new set of initiatives to reduce the misclassification of workers.

On September 19, 2011, Hilda Solis, the U.S. Secretary of Labor, announced a joint effort between the DOL, the IRS and 11 states to share information and “coordinate law enforcement” among them with the goal to “end the practice of misclassifying employees in order to avoid providing employment protections.” The participating states are Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

A few days later, on September 21, 2011, the IRS announced its Voluntary Classification Settlement Program (“VCSP”)....

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