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States Hopping on the Department of Labor’s Misclassification Bandwagon

On August 31, 2016, North Carolina became the latest state to join the U.S. Department of Labor’s (“DOL”) expansive efforts to reduce the misclassification of employees as independent contractors—making it the 33rd state participating in the DOL’s collaborative effort to reduce what it views as rampant misclassification.  Through its administrator’s interpretation, the DOL has issued guidance in its renewed efforts to combat misclassification. The DOL's initiative is a concerted effort to investigate and pursue companies that misclassify employees as contractors to avoid various tax and/or benefit burdens. The initiatives have resulted in a significant number of companies being investigated by the DOL and the payment of significant back pay amounts to employees. Several states have formally adopted the DOL’s heightened scrutiny in this area and have agreed to work closely with the feds to reduce misclassification, thereby raising the stakes for employers who utilize these arrangements. Read More ›