From JDSupra, J. Travis Hockaday reports that the United States Department of Labor signed an agreement with North Carolina to coordinate investigations and share information about misclassification of workers as independent contractors. He write:
On August 31, 2016, the North Carolina Industrial Commission, Employee Classification Section (the “Section”) and the Wage and Hour Division of the United States Department of Labor (the “WHD”) entered into a Memorandum of Understanding (MOU) under which the agencies will work together to coordinate investigations into possible instances of worker misclassification in North Carolina and to provide outreach and education programs to employers in an effort to reduce misclassification. Generally, misclassification is the practice of classifying workers who should be considered employees as independent contractors.
As North Carolina employers will recall, Governor Pat McCrory established the Section on December 18, 2015 through Executive Order 83. The Section’s mission is to: (i) create a program to receive and manage complaints of alleged worker misclassification; and (ii) coordinate efforts among various state agencies (including the N.C. Department of Revenue, the N.C. Industrial Commission, the N.C. Department of Commerce Division of Employment Security and the N.C. Department of Labor) to independently investigate complaints of misclassification received by the Section and/or those agencies and take enforcement action against businesses in violation of those agencies’ statutes and rules, if warranted.
Under the new MOU with the WHD, the WHD will, in its discretion, share with the Section information obtained in the course of its investigations of North Carolina employers that may indicate an employer’s potential violations of applicable employment tax, unemployment insurance, workers’ compensation and wage and hour laws. In turn, the Section will share such information with the other state agencies listed above for investigation and enforcement action. Similarly, the Section may provide WHD with information it believes may constitute evidence of a violation of any federal law that the WHD enforces, including the Fair Labor Standards Act, the Migrant and Seasonal Agricultural Worker Protection Act, prevailing wage requirements under the Davis-Bacon and Related Acts and the Service Contract Act, and the Family and Medical Leave Act.