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Alabama joins fed’s misclassification battle

October 03 2014

Alabama signed a memorandum of understanding to crack down on misclassification of employees as independent contractors, the U.S. Department of Labor reported yesterday. The department reported it has secured more than $18.2 million in back wages for more than 19,000 workers since it began signing memorandums of understanding with states in September 2011.

The department said its wage and hour division regularly finds large concentrations of misclassified workers in low-wage industries; in fiscal year 2013, the division’s investigations resulted in more than $83 million in back wages for more than 108,050 workers in industries such as janitorial, food, construction, day care, hospitality and garment.

“Working with the states is an important tool in ending misclassification,” said Wayne Kotowski, the Wage and Hour Division's regional administrator for the southeast. “These collaborations allow us to better coordinate compliance with both federal and state laws alike.”

Alabama is the 16th state to sign a memorandum of understanding with the DOL as part of its misclassification initiative. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have signed similar agreements.

The U.S. Department of Labor announced last month it has awarded $10.2 million to 19 states to implement or improve worker misclassification detection and enforcement initiatives in unemployment insurance programs.

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