Workerscompensation.com reports that Wisconsin’s focus on misclassification of workers as independent contractors allowed the state to collect $1.4 million.
Department of Workforce Development (DWD) Secretary Ray Allen announced that due to the department’s efforts to combat the misclassification of workers in Wisconsin across numerous industries, the state netted $1.4 million in unpaid Unemployment Insurance (UI) taxes, interest and associated penalties. This figure doesn’t include the additional dollars brought into the UI Trust Fund due to continued compliance with UI tax law.
The state’s efforts to reduce worker misclassification is part of a multi-pronged, anti-fraud initiative that is designed to ensure employers comply with requirements to classify workers correctly as employees or independent contractors under unemployment, worker’s compensation and equal rights law. Employers who misclassify workers as independent contractors unfairly avoid UI tax and other tax obligations. Conversely, combating worker misclassification has protected and strengthened the state’s UI Trust Fund, which ended 2017 with a balance of nearly $1.5 billion and increased $313 million over the year. The latest annual report detailing the state’s strong UI anti-fraud measures is available online.
“The state’s UI program plays an important role in helping workers as they rapidly transition from a period of unemployment to a new, rewarding career,” Secretary Allen said. “We owe it to the Wisconsin employers that fund this vital program to ensure that everyone plays by the rules so that workers who are out of work through no fault of their own have access to the temporary safety net they need, and so that businesses don’t gain an unfair competitive advantage by skirting legal obligations.”
DWD operates a dedicated Worker Misclassification Unit, staffed with a team of seasoned, former law enforcement professionals, many of whom specialized in investigating white-collar crime during their previous careers. This unit teams with the UI Division’s Audit Section as well as the Program Integrity Section to effectively investigate, formulate cases and pursue monies owed to the UI Trust Fund as well as associated penalties.