Insights

Home > News & Insights > Insights > U.S. Department of Labor Expands State-Level Partnerships to Enforce Employee Classification Standards

Share this on:   a b j c

U.S. Department of Labor Expands State-Level Partnerships to Enforce Employee Classification Standards

Published by on September 18, 2015

On August 13, 2015, the U.S. Department of Labor announced the formal signing of a three-year Memorandum of Understanding (MOU) between DOL and the Alaska Department of Labor and Workforce Development for the purposes of sharing information and coordinating law enforcement activities to pursue actions against employers for employee misclassification. DOL’s Wage & Hour Division […]

On August 13, 2015, the U.S. Department of Labor announced the formal signing of a three-year Memorandum of Understanding (MOU) between DOL and the Alaska Department of Labor and Workforce Development for the purposes of sharing information and coordinating law enforcement activities to pursue actions against employers for employee misclassification.

DOL’s Wage & Hour Division (WHD) is intensively focused on employee misclassification as a leading policy priority, with a specific focus on misclassification of personnel as independent contractors, instead of as employees.

Under the DOL Misclassfication Initiative, Alaska became the 25th state to sign an MOU with DOL for this effort. In cooperation with state labor agencies, WHD intends to examine activities such as the use of subcontractors, temporary agencies, labor brokers, franchising, licensing and third-party management to determine whether such strategies are being pursued to avoid classifying personnel as employees.

In addition to DOL, other federal agencies involved in the effort include the Internal Revenue Service (IRS), Employee Benefits Security Administration (EBSA), Occupational Safety and Health Administration (OSHA), Office of Federal Contract Compliance Programs (OFCCP) and the Office of the Solicitor.

According to WHD reports, the DOL Misclassification Initiative led to nearly $80 million in payment of back wages to over 109,000 workers in federal FY2014. Industries impacted included the janitorial, temporary services, foodservice, day care, hospitality and garment sectors among others.

Laconic Lookout:

Employers should take care to clearly and thoroughly review all employee and contractor relationships to ensure that current and evolving standards in classification policy are fully addressed, and that personnel classified as independent contractors fully meet that definition.

In addition, companies would be well served to review their contracts with third-party partners associated with their supply chain or business operations to further assure compliance with the law.

Topics: , , , , ,

Share:   a b j c