Briefing: January 23, 2013

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Feds Collect $9.5 Million for Misclassified ICs

More than $9.5 million in back wages has been collected for 11,400 workers misclassified as independent contractors since September 2011, the U.S. Department of Labors’ Wage and Hour Division announced last week.

Overall, a report in the Federal Register by the department of Labor indicated that $29 million in back wages have been recovered for misclassified employees since 2009. However, September 2011 was when the Wage and Hour Division began entering into memorandums of understanding with states — along with a similar partnership with the IRS — to root out companies misclassifying workers.

The U.S. Department of Labor also announced last week it signed a memorandum with its 14th state, Iowa, to reduce the number of workers misclassified as independent contractors.

“Misclassification is an issue that affects all states,” Teresa Wahlert, director of Iowa Workforce Development, said in a press release. “This memorandum will allow Iowa to utilize federal resources that weren’t available to the state previously.”

States that have signed similar agreements include California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington.

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