Monday, January 12, 2009

Maryland Department of Labor to Push Bill Increasing Penalties for Mislcassifying Employees as Independent Contractors

It will be a difficult General Assembly session with our State facing nearly a $2 billion deficit. Our State Department of Labor (the DLLR) will be pushing a bill to stiffen the penalties for misclassifying employees as independent contractors for unemployment and workers compensation. Since such a bill should produce revenue it might have a better chance of passing this year.

An article in the Daily Record has this to say about the bill's likely features:

Though [DLLR Secretary] Perez said his department had not completed the legislation it will propose this year, he said the law could be a better deterrent than the “slap on the wrist” that employers now get for underpaying for unemployment or workers’ compensation. That usually involves an order that employers make back payments and may include fines.

The bill proposed last year by DLLR would have created new civil penalties including $3,000 fines for misclassification, but Perez said the violation should be referred to as “workplace fraud.”

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