The U.S. Department of Labor ("DOL") and the Internal Revenue Service ("IRS") recently signed a memorandum of understanding to coordinate efforts to stop businesses from misclassifying employees as independent contractors. Representatives from the labor agencies of seven states, including Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington, signed similar memoranda of understanding with the DOL's Wage and Hour Division. Hawaii, Illinois, Montana and New York are also expected to sign memoranda with the Wage and Hour Division. According to the DOL, these initiatives will allow the DOL to more efficiently share information and coordinate enforcement efforts with the IRS and participating states "in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law." These recent developments are the latest in the DOL's mission to address this issue and serve as an important reminder for all employers to ensure proper classification of workers.
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