CWS 3.0: September 18, 2013

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Massachusetts Collects Millions in IC Audits

Massachusetts employers that misclassify independent contractors or commit other violations are paying a lot more as the state continues its efforts to thwart such activities.

A new report shows Massachusetts collected $15.4 million from such scofflaw employers in calendar year 2012, up from $1.4 million in the 12 months ended March 2009.

The report was released earlier this month by the Massachusetts Joint Enforcement Task Force on the Underground Economy and Employee Misclassification. Amounts collected include wages, taxes, unemployment contributions, fines and penalties.

“The money recovered this year demonstrates both the scope of the problem and our aggressive response to combat fraud and abuse,” said Massachusetts Attorney General Martha Coakley.

Some 17,000 compliance checks of Massachusetts employers took place in 2012, according to the report. And in one five-month period the Massachusetts Department of Unemployment Assistance found more than 2,300 misclassified workers and $11 million in unreported wages.

Some other findings in the report include:

  • A home healthcare agency misclassified 299 workers and failed to report $4.2 million in taxable wages.
  • An auto auction company misclassified its entire workforce of more than 1,400 employees as independent contractors.

The task force began in 2008 and includes several state government agencies. Future plans for the task force include a research study on the “underground economy” and employee misclassification.

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