Florida Partners With Federal Government to Enforce Employee Classification Laws

Author: Michael Cardman, XpertHR Legal Editor

January 16, 2015

The Florida Department of Revenue has agreed to coordinate with the US Department of Labor (DOL) in its efforts to prevent the misclassification of employees as independent contractors, according to a DOL press release.

Florida is the 19th state to sign such a partnership, following in the footsteps of Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Utah, Washington and Wyoming (although the California and Hawaii partnerships have since expired, and Louisiana's is scheduled to expire at the end of next month).

The partnerships are part of DOL's Misclassification Initiative, which the DOL's Wage and Hour Division (WHD) launched in 2011 with help from the IRS. Its stated goal is to "share information to reduce the incidence of misclassification of employees, to help reduce the tax gap, and to improve compliance with federal labor laws."

To date, all of the federal-state partnerships have involved state labor agencies that generally are responsible for enforcing minimum wage and/or overtime laws. However, the Florida agreement involves only the Florida Department of Revenue, which has no authority over minimum wage and overtime.

Although the Florida memorandum has not yet been made public, presumably it involves the collection of unemployment insurance taxes (which Florida calls reemployment assistance). Employees are covered by state unemployment insurance laws while independent contractors are not.

The DOL said its enforcement efforts are intended to "level the playing field" for responsible employers, noting that "misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law."