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Dec
2014
12

Rhode Island Launches Dedicated Task Force to Cut Down on Employee Misclassification

RI DLT

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The Rhode Island Joint Task Force on the Underground Economy and Employee Misclassification has announced the creation of a new telephone tip line so the state’s workers can anonymously report allegations of misclassification.  The task force is made up of six state agencies and works to protect not only the state’s workers, but the businesses who correctly classify their workers as employees. 

Rhode Island Department of Labor and Training (DLT) Director Charles J. Fogarty’s statement reveals that not all of the task force’s efforts are adversarial in nature:

One of our major goals is educating, not violating, Rhode Island companies that might unknowingly be misclassifying their workers,” Fogarty said. “At the same time, however, fighting misclassification is an important strategy to promoting shared prosperity in our state.”

Rhode Island Attorney General Peter F. Kilmartin took a harsher tone against unscrupulous employers while explaining what he believes to be the Joint Task Force’s role:

“While the vast majority of Rhode Island businesses are playing by the rules, those who aren’t must be identified and stopped.  This small number of corrupt businesses is denying workers their basic protections by misclassifying employees in order to evade paying for unemployment benefits and workers’ compensation insurance. The result is an uneven playing field that hurts honest and law-abiding employers.”

The Joint Task Force was created following the signing of a Memorandum of Understanding with the U.S. Department of Labor (DOL). The DOL has ramped up its efforts to curb misclassification under the Obama administration.  In a press release earlier this month the DOL explained in detail the many ways misclassification hurts the economy:

“Business models that attempt to change or obscure the employment relationship through the use of independent contractors may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem, as these employees often are denied access to critical benefits and protections — such as family and medical leave, overtime compensation, minimum wage pay, Unemployment Insurance, personal protective equipment and retirement benefits — to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.”

Rhode Island tax administrator David Sullivan believes the addition of a telephone tip line (401-574-8477) and dedicated website (under construction) will help the state in its mission to end misclassification.  

“By using the tip line, workers and others can let us know about employers who are misclassifying workers as independent contractors.  Rest assured that we will follow up on all tips. Businesses that don’t play by the rules end up increasing the tax burden on those businesses that do play by the rules. By enforcing our laws, we can help to level the playing field — and that helps everyone, including employers and employees.”

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