Missouri Misclassified Worker Audits Improve
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.