Louisiana Workforce Commission Executive Director Ava Dejoie announced today that the agency set a record for the second consecutive year in identifying the number of workers improperly classified as independent contractors in 2015.
LWC agents audited 1,068 employers last year and discovered 19,956 misclassified workers, more than $50 million in unreported taxable wages and approximately $1.5 million in unreported and unpaid unemployment insurance taxes. The LWC’s previous record was 12,782 cases of misclassification identified in 2014.
Misclassifying employees as independent contractors can lead to companies not paying unemployment taxes, workers’ compensation premiums and their portion of Social Security and Medicare taxes. Employers who engage in this practice, knowingly or otherwise, may gain an unfair competitive advantage by improperly lowering labor costs. The employees, in turn, have no guaranteed access to unemployment insurance should they lose their jobs by no fault of their own.
“We are committed to using every tool at our disposal to stamp out this harmful practice,” said Executive Director Dejoie. “This outstanding result is a testament to our hard-working employees, partner agencies and members of the public who provided information and tips.”
Until 2010, the federal government required that such audits be conducted randomly. That year, the LWC identified fewer than 300 misclassified employees. Today, LWC audits are risk-based and use tips, complaints and information from partner agencies and the public. They also focus on industries like construction and leisure and hospitality in which worker misclassification is especially prevalent.
“We investigate every single tip or complaint provided to us by members of the public,” said Dejoie. “It’s essential that anyone who believes a company might be acting inappropriately comes forward and provides a tip at www.laworks.net so that we can ensure that Louisiana’s workers are protected and that our unemployment insurance trust fund is properly funded.”
After the employer is notified of the LWC’s determination, the employer must correct the classifications and pay unemployment taxes due, including possible interests and penalties. An employer found to be misclassifying workers may appeal the finding to an administrative law judge.
Employers who are unsure whether they should classify their workers as employees or independent contractors can access information online at www.laworks.net.
About the Louisiana Workforce Commission
The Louisiana Workforce Commission is an agency of state government that administers programs designed to enhance workforce growth and provide family-sustaining jobs for Louisiana residents. The commission monitors employment, administers unemployment compensation and tax funds, provides training resources for employers and employees and oversees worker compensation benefits. The agency also gathers and supplies information on the labor market and occupational sectors in Louisiana.
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