Wednesday, February 02, 2011
Understanding the Workplace Fraud Act
The Workplace Fraud Act has been in effect since October 1, 2009, but “there has been a real lag in terms of seeing and realizing the impact of the 2009 legislation,” says Craig Ballew, of Ferguson, Schetelich & Ballew P.A. and Co-Chair of the Chamber’s Employment Issues Committee.
The Workplace Fraud acts gives Maryland’s Department of Labor, Licensing & Regulation (DLLR) extensive authority to investigate the classification of construction and landscaping industry workers as independent contractors. It imposes a presumption that workers in these industries are employees and forces penalties on employers for misclassification.
To determine whether a worker qualifies as an employee of an independent contractor, Maryland uses the ABC test. Under this test, an employer-employee relationship is presumed unless the individual performing the work is an exempt person under the law and the employer demonstrates that:
A. The individual is free from control and direction;
B. The individual customarily is engaged in an independent business of the same nature; and
C. The work is outside of the usual course of business of the employer or performed outside of any place of business of the employer.
The law allows an employer who unknowingly misclassifies an employee to come into compliance within 45 days of a misclassification determination by DLLR, or face a penalty of up to $1,000 per misclassified employee. Employers who deliberately misclassify workers may receive a penalty of up to $5,000 per misclassified employee. Repeat violators are subject to assessments of up to $20,000 per misclassified employee.
Here is a video of Craig Ballew, Ferguson, Schetelich & Ballew P.A., expressing in detail how the Workplace Fraud Act affects businesses throughout the state. For more information, contact Allyson Black at .(JavaScript must be enabled to view this email address).
