Employment-US Labor Department Signs Agreement With New Hampshire Department Of Labor To Reduce Misclassification Of Employees

According to a News Release (11/12/2014), officials from the U.S. Department of Labor and the New Hampshire Department of Labor have signed amemorandum of understanding, with the goal of protecting the rights of employees by preventing their misclassification as something other than employees, such as independent contractors or other nonemployee statuses. The News Release states the following:

Under this agreement, both agencies will share information and coordinate law enforcement. The memorandum of understanding represents a new effort on the part of the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. The New Hampshire Department of Labor is the latest state agency to partner with the Labor Department.

Business models that attempt to change or obscure the employment relationship through the use of independent contractors may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem, as these employees often are denied access to critical benefits and protections — such as family and medical leave, overtime compensation, minimum wage pay, Unemployment Insurance, personal protective equipment and retirement benefits — to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.

Memoranda of understanding with state government agencies arose as part of the department’s Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have signed similar agreements. More information is available on the Department of Labor’s misclassification website athttp://www.dol.gov/misclassification/.