New Hampshire Joins DOL to Combat Misclassification of Independent Contractors

Author: Michael Cardman, XpertHR Legal Editor

November 19, 2014

New Hampshire is partnering with the federal government to investigate employers they suspect are misclassifying employees as independent contractors.

The New Hampshire Department of Labor and the US Department of Labor (DOL) on November 12 signed a memo agreeing to:

  • Conduct joint investigations;
  • Coordinate enforcement activities; and
  • Make referrals of potential violations.

The agencies also plan to take actions intended to prevent misclassification before it starts, such as sharing training materials and providing employers and employees with compliance assistance information.

New Hampshire is the 17th state to sign such an agreement, following in the footsteps of Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

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 Internal Revenue Service. 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."

The DOL declined a request from XpertHR for information about how many DOL investigations have been initiated as the result of a referral from one of the state agencies that are part of the initiative.

"While we do not disclose specific data about our referrals to or from other government agencies, we can tell you that this collaboration is making a difference," spokeswoman Tania Mejia said in an email. "In Fiscal Year 2013, WHD investigations resulted in more than $83 million in back wages for more than 108,000 workers in industries such as janitorial, food service, construction, day care, hospitality and garment. WHD regularly finds large concentrations of misclassified workers in low-wage industries."