Department of Labor signs agreement with VEC to protect workers from misclassification

economic-forecast-headerThe U.S. Department of Labor’s Wage and Hour Division and the Virginia Employment Commission signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses.

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.

The Wage and Hour Division is working with the IRS and 30 other states(link is external) 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.

“The Wage and Hour Division continues to attack this problem head on through a combination of a robust education and outreach campaign, and nationwide, data-driven strategic enforcement across industries,” said David Weil, administrator of the Wage and Hour Division. “Our goal is always to strive toward workplaces with decreased misclassification, increased compliance, and more workers receiving a fair day’s pay for a fair day’s work.”

Commissioner Ellen Marie Hess said, “Virginia is excited to partner with the U.S. Department of Labor’s Wage and Hour Division on this important issue. Virginia has increased its emphasis on identifying misclassified workers.  This MOU is another tool Virginia has in our effort to end misclassification of workers and the harm it causes.”

More information on misclassification and the effort are available at www.dol.gov/misclassification.



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