DOL Continues to Target Independent Contractor Misclassification

The U.S. Department of Labor’s (DOL) 2012 budget proposal includes a request for more than $15 million to enable the agency’s Wage & Hour Division to hire new personnel and increase the number of investigations it performs each year by over 3,000.

“Our budget request reflects our commitment to help America ‘win the future’ by sustaining a competitive workforce and ensuring worker protections,” said Secretary of Labor Hilda L. Solis. “Our fiscal year 2012 request reflects what it will take to keep America’s workforce strong and innovative. It also makes responsible and reasonable cuts that are rooted in current economic realities and a continued focus on increased efficiency and effectiveness.”
The DOL will examine a variety of documents throughout the course of a misclassification investigation, including payroll and tax records, independent contractor agreements, and pay stubs. The DOL says it will focus its investigations on industries with traditionally high rates of violations, such as construction, child care, home health care, grocery stores, janitorial, business services, poultry and meat processing, and landscaping.
“Employers should identify the legal risks associated with independent contracting and ensure that any vendor classified as an independent contractor meets the applicable legal tests,” says MSEC attorney Jennifer England. “Careful assessments can assist employers if they face an audit, but only if done consistently and on an ongoing basis.”