Over the past several years, many business owners have noticed their classification of workers being closely scrutinized by a variety of federal and state regulatory agencies. Whether a worker is classified as an “employee” as opposed to an “independent contractor” or an “exempt” employee as opposed to a “nonexempt” employee can have significant impact on an employer’s bottom line. At a time when every dollar counts, state and federal government agencies are aggressively pursuing initiatives aimed at business owners, as well as workers’ compensation insurers, to stop and correct misclassification. Along with back taxes and wages owed, penalties can be severe.
In addition to the state and federal agencies, workers who have been misclassified are also going after business owners. These workers, when misclassified, often suffer lost wages because employers do not have to pay overtime and benefits to independent contractors or exempt workers. Their claims, which are termed “wage theft” claims and are attractive to many plaintiff attorneys because of potential awards of attorneys’ fees and treble damages, are popping up in significant numbers.
If you employ workers in the construction or landscaping industries, under Maryland’s Workplace Fraud Act, the Commissioner of Labor and Industry is granted broad authority to investigate workplace fraud. Employers in these industries have stringent notice, record-keeping and other requirements with respect to independent contractors. Construction and landscaping workers are also presumed to be employees under most circumstances unless certain actions are taken by the employer.
If you have received a letter from the Maryland Department of Labor, Licensing & Regulation, the IRS, the U.S. Department of Labor or your workers’ compensation insurance carrier regarding an audit of a workers’ classification or a claim from an attorney regarding their client’s claim for back-wages, and other losses or receive notice are an employee’s wage theft claim against you, it is strongly recommended you contact a PK Law Worker Misclassification and Wage and Hour Attorney.