The DOL’s Proposed “Employee Misclassification Initiative”

Testifying before the House Committee on Appropriations’ Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, Department of Labor Secretary Hilda Solis announced DOL’s proposed “Employee Misclassification Initiative.” The Initiative would provide the following:

• $12 million and 90 new investigators for DOL’s Wage and Hour Division to “ensure that workers are employed in compliance with the laws we enforce”;

• Support for “new, targeted [Employee and Training Administration] efforts to recoup unpaid payroll taxes due to misclassification and promote the innovative work of States on this problem,” including $10.9 million for a pilot program awarding States that successfully “detect[] and prosecut[e] employers that fail to pay their fair share of taxes due to misclassification and other illegal tax schemes that deny the Federal and State [Unemployment Insurance] Trust Funds hundreds of millions of dollars annually”;

• $1.6 million for DOL’s Office of the Solicitor and allocating 10 employees to “support enforcement strategies, with a focus on coordination with the States on litigation involving the largest multi-State employers routinely abuse independent contractor status”;

• $150,000 for OSHA to “train inspectors on worker misclassification issues”; and

• Proposed legislative changes that would “require employers to properly classify their workers, provide penalties when they do not, and restore protections for employees who have been classified improperly.”

Check out Secretary Solis’s prepared statement here.