Briefing: August 20, 2014

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Illinois claims lead in auditing for misclassified ICs

Illinois led the nation in auditing employers for independent contractor misclassification, the Illinois Department of Employment Security announced this month. Employers that get caught face penalties.

The state audited 3,635 employers in 2013 and identified 19,765 misclassified employees, according to the department.

Misclassification of these workers resulted in $245.6 million in unreported taxable wages and $5.1 million in unreported contributions that fund unemployment insurance benefits.

Employers who break the law can face fines of at least $10,000 to up to 60 percent interest in failed payments.

“The consequences of misclassification are easy to see when a worker is hurt or an honest business owner is underbid for a project,” said Jay Rowell, direction of the Illinois Department of Employment Security. “What hides in plain sight are the socialized costs that occur when a dishonest employer deceives a customer and cuts corners by not playing by the rules.”

For more on Illinois’ misclassification-fighting efforts, click here.