MA Governor Cracks Down on Misclassification

One by one, the states are turning up the heat on independent contractor classification. On March 12, 2008, Mass. Governor Deval Patrick signed Executive Order 499 creating a joint task force to identify and crack down on illegal misclassification of workers as independent contractors.

"Through joint efforts, the Task Force is charged with combating the underground economy and employee misclassification, including efforts to: (a) foster compliance with the law by educating business owners and employees about applicable requirements; (b) conduct joint, targeted investigations and enforcement actions against violators; (c) protect the health, safety and benefit rights of workers; and (d) restore competitive equality for law-abiding businesses."

Download a PDF of the original Executive Order 499.

The Boston Globe covered the issue, saying the MA initiative is modeled on similar action taken in the states of California and New York. "Governor Deval Patrick launched an initiative yesterday to crack down on unscrupulous business owners who dodge taxes and other costs by paying workers in cash or by calling them independent contractors. State officials hope that the initiative will bring in millions of dollars in revenue."

We predict this issue will continue to rise in prominence as other states take similar measures to recapture tax revenues, and with the unions supporting such activity, the political forces are aligned to help push changes through an ordinarily sticky process. As the risk increases, this is a good time to ask, "Are we improperly classifying employees as independent contractors?" Visit our Compliance Center and also check out our Research tab to learn more about proper worker status classification, or talk with our experts for a complimentary consultation.