Illinois to Create Online Employee Misclassification Complaint System
Author: Robert S. Teachout, XpertHR Legal Editor
September 27, 2017
Employees in Illinois who claim they were misclassified as independent contractors soon will be able to file a complaint online. A new law requires the Illinois Department of Labor (IDOL) to create an online employee misclassification referral system on its website.
Under the new law, IDOL will create an online form on which a person may enter all of the information needed to file a misclassification complaint with the department and three other state agencies - the Department of Employment Security, the Illinois Workers' Compensation Commission and the Department of Revenue. The system will refer complaints to the appropriate agency or agencies based on the information provided. An agency that receives a complaint about misclassification may direct the individual to the employee misclassification referral system or make the complaint on that person's behalf. However, the system will not accept anonymous or third-party complaints.
Federal and state regulators have taken a heightened interest in employee misclassification due to the loss of billions of dollars of uncollected Social Security taxes, unemployment taxes and income taxes caused by the problem. North Carolina recently established a new office to focus specifically on employee misclassification. And the US Department of Labor's Wage and Hour Division is working with 37 states on its misclassification initiative.
Because misclassifying employees exposes an employer to back taxes, back wages, possible I-9 violations and other potential penalties if a federal or state agency audit or lawsuit challenging workers' status occurs, employers should do a self-audit and correct any improper classifications. They also can participate in the IRS's Voluntary Classification Settlement Program.