January 28, 2015
On Jan. 13, 2015, the DOL and the state of Florida signed a memorandum of understanding announcing that they will work together to prevent the improper classification of employees as independent contractors or other nonemployee workers. The agreement states that the two entities will share information and coordinate enforcement in an effort to protect employee rights by reducing the practice of misclassification of employees.
The agreement arose as part of the DOL Misclassification Initiative. Sixteen other states have signed similar agreements: Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington. Employers should be aware of the increased attention given to the misclassification issue by the DOL and by state agencies. This is an important issue for all size employers, but specifically large employers who are subject to the employer mandate must identify full-time employees and offer them affordable, minimum value coverage, or else pay a penalty. Misclassification of employees can significantly impact the potential liability under the employer mandate for these employers.
DOL News Release » DOL Misclassification Initiative Web Page »