<!–:en–>COORDINATED EFFORTS OF GOVERNMENT ENTITIES TO TARGET EMPLOYEE MISCLASSIFICATION <!–:–>

The Department of Labor on Sept. 19 announced new agreements with the Internal Revenue Service and several states to share information and coordinate efforts to combat the misclassification of employees as independent contractors. It appears that “more companies are using business models that attempt to change, obscure, or eliminate the employment relationship” by using “subcontractors, independent contractors, franchises, third-party management agreements, labor contractors, and staffing companies,” Labor Secretary Hilda Solis said. Employers that skirt the rules gain an unfair advantage over law-abiding employers by avoiding certain costs, such as payroll taxes. In addition, misclassification can result in employees being denied the minimum wage, overtime pay, unemployment insurance, and workers’ compensation benefits, Solis said. 09-20-2011. Bureau of National Affairs.