Provided by: Judge Ruth B. Kraft
New York State’s Task Force on Employee Misclassification has issued its report on the Department of Labor’s 2013 initiatives. Over 13,000 audits and investigations were completed, resulting in the assessment of $55,000,000 in unpaid unemployment tax contributions and the conclusion that 127,000 workers had been misclassified as independent contractors.
The top twelve industries misclassifying industries identified in 2013 were:
We also know that the Department of Labor has in mind for 2014---because they have announced it. Expect more multi-state enforcement actions. My impression of DOL has always been that they like to go after low hanging fruit. Small companies typically will not invest heavily in legal counsel and do not understand the nuances of the law. The bigger players are much more likely to fight the good fight with lawyers on board as well as to strategize changes in their organizational structures. DOL has also signaled that it will focus on unemployment insurance fraud; I can only hope that this means that they will turn the focus onto claimants who are collecting benefits while sunning themselves on the beaches of Bora Bora, the Dominican Republic and Costa Rica (all real cases of mine!).
Unfortunately, we do know that the state will be focusing on three industries which have been regulated by dedicate statutes which go well beyond the norm: construction, trucking and home healthcare. However, in all candor, no industry whatsoever is immune from governmental scrutiny.
A business’s decision on whether to restructure should best be undertaken when it is not playing defense. A proactive, measured approach with focuses on documentation should be considered a necessity in this regulatory environment and the costs associated with implementation pale when compared to audit defense.
Have a question or comment?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.
The top twelve industries misclassifying industries identified in 2013 were:
- Professional and technical services
- Hospitality (restaurants)
- Administrative and support services
- Ambulatory health care services
- Construction
- Education
- Performing arts and sports
- Specialty trade contractors
- Housekeeping and laundry services
- Couriers and messengers
- Film industry
- Amusement and gambling industries
We also know that the Department of Labor has in mind for 2014---because they have announced it. Expect more multi-state enforcement actions. My impression of DOL has always been that they like to go after low hanging fruit. Small companies typically will not invest heavily in legal counsel and do not understand the nuances of the law. The bigger players are much more likely to fight the good fight with lawyers on board as well as to strategize changes in their organizational structures. DOL has also signaled that it will focus on unemployment insurance fraud; I can only hope that this means that they will turn the focus onto claimants who are collecting benefits while sunning themselves on the beaches of Bora Bora, the Dominican Republic and Costa Rica (all real cases of mine!).
Unfortunately, we do know that the state will be focusing on three industries which have been regulated by dedicate statutes which go well beyond the norm: construction, trucking and home healthcare. However, in all candor, no industry whatsoever is immune from governmental scrutiny.
A business’s decision on whether to restructure should best be undertaken when it is not playing defense. A proactive, measured approach with focuses on documentation should be considered a necessity in this regulatory environment and the costs associated with implementation pale when compared to audit defense.
Have a question or comment?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.