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Florida Signs MOU with DOL to Combat Employee Misclassification

Employee v. Contractor (a)

On 01.13.15, the Florida Department of Revenue signed a Memorandum of Understanding with the US Department of Labor, allowing the agencies to cooperate in investigating alleged misclassification of employees as independent contractors in Florida.  Under the terms of the MOU, the agencies will collaborate extensively:

  • Coordinating investigations and enforcement activities in Florida in “designated priority industries.”
  • Referring, from one agency to the other, possible misclassification violations.
  • Exchanging information about settlements involving misclassification issues, so the FDOR and the DOL can more effectively follow-up to ensure compliance with settlement terms.
  • Coordinating in criminal investigations involving misclassification issues, where there is overlapping jurisdiction.
  • Exchanging information — including confidential information — between agencies, without that exchange constituting a “public disclosure” that might jeopardize the confidential nature of the materials.

Florida joins a number of other states who have signed similar MOUs with the DOL.  The other states with an MOU, currently in effect, are Alabama, Colorado, Connecticut, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Utah, Washington, and Wyoming.

Interestingly, a workforce agency signed the MOU on behalf of the other states.  In Florida, the signatory-agency was the FDOR, which isn’t responsible for policing violations of the minimum wage or overtime laws.  On the other hand, the FDOR signing the MOU underscores a relevant, but frequently-overlooked, state concern – that misclassification of employees as independent contractors deprives a state of “unemployment insurance taxes.”  This is an issue of considerable significance to the FDOR.

What will this inter-agency collaboration mean for Florida employers?  Hard to say.  But certainly, Florida employers should consult with counsel, to ensure that their classification of personnel is defensible, and doesn’t leave the employer exposed and vulnerable.

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