The U.S. Department of Labor (DOL) is stepping up enforcement of federal labor law – including the Fair Labor Standards Act (FLSA) – in order to reduce misclassification of employees. The DOL has been partnering with individual states by signing Memorandums of Understanding (MOU) which allows the DOL to coordinate enforcement and share information with participating states in an effort to ensure workers receive the protections they have been granted under the law. So far, 13 states are participating in the initiative, including Missouri.
DOL Misclassification Initiative
Misclassification of employees is a growing problem. For example, if a Missouri employer misclassified an employee as an independent contractor instead of an hourly employee, they may not be paying the correct overtime, workers’ comp premiums or Unemployment Insurance and FICA taxes.
Last year alone, the DOL Wage and Hour Division collected more than $5 million for FLSA overtime and minimum wage requirement violations when employees were incorrectly classified.
While speaking of a recent MOU signing, Nancy J. Leppink, deputy administrator of the U.S. DOL, stated in a DOL news release, “This memorandum of understanding helps us send a message: We’re standing united to end the practice of misclassifying employees.” She continued, “This is an important step toward making sure that the American dream is still available for employees and responsible employers alike.”
Even though states continue to enter into MOUs with the DOL, Missouri was one of the first states join in this initiative in 2011. Hopefully this initiative will help employees be classified properly and be paid the compensation and overtime they deserve.
Source: U.S. DOL, “Employee Misclassification as Independent Contractors“