|April 20, 2012|
Previously published on April 2012
In our continuing effort to keep you apprised of the latest developments in wage and hour law, we refer you to a report released today indicating that, compared to last year, Massachusetts government investigators have collected substantially more fines, back taxes and restitution from employers failing to pay required wages, carry workers’ compensation insurance, comply with health and safety licensing requirements and pay income, payroll, corporate, sales or meals taxes. The heightened enforcement efforts underscore the fact that Massachusetts, like many other states, has dedicated considerable resources to investigating instances of suspected workplace fraud and misclassification of employees as independent contractors.
In 2008, Governor Deval Patrick signed Executive Order No. 499 establishing the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification. The Governor charged the Task Force with reducing workplace fraud and employee misclassification through agency cooperation and information sharing, public education and outreach, and targeted investigations and enforcement actions. Each year the Task Force submits a report to the Governor summarizing its activities for the preceding year. Today, the Task Force published its report for 2011 on the Web site of the Executive Office of Labor and Workforce Development.
The Task Force reports that it and its member agencies fielded thousands of complaints, conducted over 8,000 compliance cross-checks, brought more than 7,000 workers under workers’ compensation insurance coverage, referred at least 191 cases to the Department of Revenue for auditing, and issued more than 3,000 Stop Work Orders for workers’ compensation violations. As a result of its efforts in 2011, the Task Force recovered $10,930,933 from delinquent employers; this represents an increase of $4,441,364 from 2010 and of $9,491,909 from only three years ago. It also announced a new partnership between the Task Force and the United States Department of Labor (one of the few such partnerships in the country) to address the so-called underground economy.
We anticipate that these vigorous enforcement efforts will continue for the foreseeable future, especially as Massachusetts and other states look for ways to improve the collection of tax revenues in a depressed economic climate. In light of these enforcement efforts, employers must be especially vigilant in ensuring legal compliance with, in particular, the wage and hour and independent contractor laws.