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Louisiana finds record number of IC misclassifications

November 19, 2015

The Louisiana Workforce Commission reports it is on track toward a second consecutive record-setting year in the identification of workers misclassified by employers as independent contractors. Through Nov. 12, LWC identified nearly 9,400 misclassified employees in audits of 865 companies. It expects audits in process through the end of 2015 to surpass 2014’s record discovery of 12,782 misclassified employees.

LWC auditors have identified about $83 million in under-reported wages to date in 2015, resulting in the collection of more than $923,000 in unemployment insurance taxes owed by employers.

“We’ve ramped up our efforts in recent years thanks to new laws such as Louisiana’s Fair Play Act of 2012 and cooperation with state and federal agencies that are sharing data on companies,” said LWC Executive Director Curt Eysink. “We want to provide a level playing field for companies that are following the law and are providing the benefits they are required to offer their employees.”

Louisiana led the nation in 2014 by finding 11 misclassified workers per audit. Until 2010, the federal government required that unemployment insurance audits be done randomly. That year, fewer than 300 misclassified employees were identified in Louisiana. LWC’s audits are now risk-based, using tips, complaints, information from partner agencies and also focus on industries, such as construction, hospitality and personal services, in which worker misclassification has been prevalent.