Massachusetts Continues Its Efforts Against Independent Contractor Misclassification

By: Bob Shea

Massachusetts Governor Patrick’s administration recently announced that it is launching a first-of-its-kind study to examine the scope and financial cost of the Commonwealth’s “underground economy.” Over the next year the study will seek to identify the extent of “employment fraud” by industry category and attempt to determine the amount of money the Commonwealth is losing each year in unpaid taxes. The study will focus on the practice of improperly misclassifying workers as independent contractors, which allows businesses to avoid wage law requirements, unemployment and payroll taxes, and workers compensation insurance and health insurance costs.

Further, the Executive Office of Labor and Workforce Development (“EOLWD”) announced that its Department of Unemployment Assistance (“DUA”) concluded audits of three business that uncovered $11.5 million in unreported wages, 2,300 misclassified workers, and $2,554,000 in unpaid DUA obligations. DUA credited the Joint Task Force on the Underground Economy and Employee Misclassification (“JTF”) with helping “to bringing the businesses into compliance.” The JTF was established by Governor Patrick in 2008 to coordinate multiple state agencies’ efforts attacking worker misclassification. Please visit MBBP’s resources page to read an article concerning the problems that changes in Massachusetts independent contractor have caused for many businesses.

Feel free to contact Bob Shea with any questions on this topic.