Friday, November 20, 2009
Employers Should Prepare for Enforcement of the Workplace Fraud Act of 2009
Maryland Employers should review and prepare for the enforcement of new regulations by the Department of Labor, Licensing, and Regulation (DLLR) under the recently enacted Workplace Fraud Act of 2009.
The Act, which took effect October 1, 2009, affects businesses in the construction and landscaping industries that use independent contractors it intends to identify and penalize employers misclassifying employees as independent contractors. Governor Martin O’Malley has recently issued an Executive Order to create a task force that, among other its other responsibilities, has the ability to propose legislation to investigate other industries for misclassification.
The Act creates the standards by which employers in the construction and landscaping industries classify independent contractors, awards back pay to employees who were misclassified and penalizes employers that “knowingly” misclassify employees. The Act also creates new, more stringent tests employers must use to demonstrate that the employee is properly classified if challenged, and increases penalties for employers who violate regulations.
An article from Littler Mendelson, P.C. gives a detailed account of the new regulations put in place by the Act and how to prepare for the enforcement of these regulations. See the article here (PDF).
