The Wage and Hour Division (WHD) of the Department of Labor (DOL) and the South Dakota Department of Labor and Regulation have signed a three-year Memorandum of Understanding (MOU) intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee status. The two agencies will provide clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, share resources, and enhance enforcement by conducting joint investigations and sharing information consistent with applicable law, according to a news announcement.
The WHD says it is working with the Internal Revenue Service and 29 other states to combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled. Labeling employees as something they are not –- such as independent contractors –- can deny them of basic rights such as minimum wage, overtime and a host of other benefits. Misclassification also generates substantial losses to the federal government and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers’ compensation funds.