Rhode Island signed a three-year memorandum of understanding to crack down on misclassification of employees as independent contractors, the US Department of Labor reported.

Rhode Island is the 21st state to sign a memorandum of understanding with the DOL as part of its misclassification initiative. Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Utah, Washington, Wisconsin and Wyoming state agencies have signed similar agreements.

“Working with the states is an important tool for ending misclassification and other workplace abuses,” said M. Patricia Smith, solicitor of labor of the U.S. Department of Labor. “These collaborations allow us to better coordinate and ensure compliance with both federal and state laws alike.”

“The misclassification of employees as independent contractors is workplace fraud,” said Scott Jensen, director of the Rhode Island Department of Labor and Training. “Rhode Island will not allow bad actors to take advantage of their employees by failing to provide them with necessary workplace protections like Workers' Compensation insurance, unemployment benefits and overtime pay. Allowing this activity to persist is unfair to Rhode Island businesses that play by the rules.”