July 26, 2016

On July 7, 2016, the Utah Department of Workforce Services extended its memorandum of understanding with the U.S. DOL regarding worker misclassification. Utah and the DOL had previously entered into two memoranda (one was an original and the second was an extension). With the new extension, the memorandum will expire on July 7, 2019.

As background, the memorandum is meant to provide outreach about employee misclassification to employers and employees, to share resources and information about misclassification and to enhance misclassification enforcement through investigations. The memorandum arose as part of a larger DOL misclassification initiative that includes similar DOL agreements with the IRS and with 30 other states.

Utah employers should be aware of the increased attention given to the misclassification issue by the DOL and state agencies. This is an important issue for employers of all sizes, but particularly for larger employers that are subject to PPACA’s employer mandate. Such employers must identify full-time employees and offer them (and their dependents) affordable, minimum value coverage or risk a penalty. Employee misclassification can significantly impact potential liability under the employer mandate. Employers should work with outside counsel with respect to proper worker classification, as it involves an analysis that is extremely dependent on the facts and circumstances surrounding each situation.

Memorandum of Understanding »
DOL Misclassification Initiative Home Page »