Worker Misclassification Enforcement in MD

August 3, 2009 | Subscribe to our RSS Feed

Martin O’Malley issued an executive order July 14 establishing a new task force in an effort to crack down on employers who violate tax and other laws by misclassifying employees as independent contractors.

“This executive order, combined with passage this year of the Workplace Fraud Act, should send the clear message that Maryland will not tolerate employers who try to cheat the system, and that we are committed to arming ourselves with the tools necessary to eradicate this pervasive practice,” O’Malley said in a statement.

Maryland Labor Secretary Thomas E. Perez said, “Our goals are threefold: to recoup state revenues, to ensure workers are treated fairly, and to level the playing field for employers who play by the rules.”

According to the executive order, “recent audits show that approximately 20 percent of Maryland employers misclassify employees as independent contractors.”

Those employers, it said, “avoid their obligations under federal and state labor, employment, and tax laws, including laws governing minimum wage, overtime, prevailing wage, living wage, unemployment insurance, workers’ compensation insurance, temporary disability insurance, wage payment, and income taxes.”

Misclassification also denies the state “millions of dollars in tax revenues, unemployment insurance contributions, and workers’ compensation premiums,” it said.