The Wage and Hour Division (WHD) of the Department of Labor (DOL) and the Virginia Employment Commission 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 statuses.
The two agencies announced they 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.
The WHD is working with the IRS and 30 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, according to the WHD.
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.