Missouri Department of Labor and Industrial Relations

The Missouri Department of Labor and Industrial Relations misclassified worker investigation procedures were recently reviewed by Susan Montee, Missouri State Auditor.

Misclassified workers are those that have been improperly classified as independent contractors instead of employees by their employer. This helps some employers avoid paying unemployment insurance and workers’ compensation, which places an unfair burden on compliant employers who classify their workers correctly and pay all their taxes.

Since January 2009, many of the recommendations in the audit were already in the process of being implemented. In June of 2009, the Department took steps to target auditing and to obtain IRS 1099 data to assist in identifying improperly classified workers. This required extensive computer reprogramming, delaying implementation until January 2010. Since the Misclassified Workers Detection System (MWDS) has been fully operational, we have increased the numbers of misclassified workers identified by more than 1200% compared to 2008. Additionally, identifying misclassified workers has allowed us to double our contributions collections since 2008.

“We are identifying those people who are cheating the system and leveling the playing field,” said Department Director Larry Rebman.

The audit, released Oct. 5, noted that Missouri is currently ranked 50 out of 51 state labor agencies (including the District of Columbia) in the identification of misclassified workers.

This is an important issue for the state of Missouri, and the Labor Department is doing its part to continue to set standards for employers and stabilize the economy. Protecting workers from being misclassified and excluded from benefits designed to provide a safety net for them is one of our top priorities.

Employers and employees alike have been benefiting from the Missouri Department of Labor’s job saving program Shared Work for several years now, but the amount of employers who choose to renew is steadily on the rise. In 2010, department-proposed legislation was passed allowing the amount of weeks an employer can utilize Shared Work to double, from 26 weeks per plan year to 52.

From January through September of this year, employers who chose to renew their participation in the Shared Work program increased 126 percent from this time period in 2009. The number of affected employees rose by 29 percent. More than 100 employers chose to participate in the Shared Work program for the first time in 2010, with nearly 200 returning employers.

“When companies are forced to cut down on labor costs, often laying off workers is the easiest way to go. However, by participating in the Shared Work program, we’ve demonstrated to our employees during what has proven to be very difficult economy, our willingness to look for other more compassionate options,” said a program participant. “As a result, we’ve been able to retain a significant number of our talented team members which puts us in a great position as the economy improves to have the capacity and skilled resources immediately in place to meet the increasing customer demand.”

The Shared Work program is an alternative to layoffs when an employer is faced with a reduction in available work. Instead of laying off workers, the employer simply divides the available work between all employees, and the employees receive a portion of unemployment benefits while working reduced hours.

For more information about the Shared Work program, call 573-751-WORK(9675) or visit our Shared Work page.

Every day thousands of people drive across bridges throughout Missouri, and the Missouri Department of Transportation (MODOT) is responsible for making sure these bridges are safe. To ensure these bridges are built safely, the contractors need to provide the proper safety training and pay the proper wages to their workers. That’s where the Missouri Department of Labor steps in.

KTU Constructors was hired to complete the Safe & Sound Bridge Improvement Program, the largest bridge improvement project in Missouri history at a cost of $487 million to rebuild 554 bridges across the state. KTU Constructors is a joint venture of Kiewit Western Co., Traylor Bros., Inc. and United Contractors, Inc.

To verify that KTU and the 100 subcontractors working on this project are in compliance with the law, they invited the Missouri Department of Labor, MODOT, External Civil Rights Group, the U.S. Department of Labor Wage & Hour Division, and the Federal Highway Administration to provide a full day presentation about Missouri state laws and federal laws.

One subcontractor who attended the day-long presentation stated, “I was a bit apprehensive about this presentation, assuming it was the same run of the mill training. But by the time I left, I was more educated about the requirements I had to meet and felt like this was a real team effort to make sure we put our bridges back together the right way.”

This program is separated into two different phases, tasked with improving 802 of the state’s lowest-rated bridges by October 31, 2014.