Maryland Labor Department Officials Meet with Business Owners, Employees, Contractors and Labor Leaders on Worker Classifications and the Maryland Workplace Fraud Act


Second information session scheduled for tomorrow in Salisbury

WYE MILLS, MD (November 29, 2011) – Top-ranking officials from the Maryland Department of Labor (DLLR) continued today an outreach campaign on the state’s workplace classification policies. DLLR hosted an information session at Chesapeake College on Maryland’s Eastern Shore to update business owners, employees, contractors and labor leaders on the state’s workplace classification guidelines and the Maryland Workplace Fraud Act, which was passed by the General Assembly in 2009. A second forum is scheduled for tomorrow morning at Salisbury University.

Maryland Labor Commissioner Ron DeJuliis and Assistant Secretary for Unemployment Insurance Julie Ellen Squire were joined at the forum by DLLR staff members and representatives from the Workers Compensation Commission and the Comptroller’s office.

“The Maryland Department of Labor’s most important priorities are protecting working families and the Workplace Fraud Act is a vital tool toward that goal. Even more, this Act helps protect a level playing field for business owners,” said Maryland Labor Secretary Alexander M. Sanchez. “I applaud Commissioner DeJuliis and Assistant Secretary Squire for their proactive efforts to educate Maryland business owners, employees and contractors about the important protections in the Workplace Fraud Act.”

In September, Maryland and 10 other states signed a memorandum of understanding with the U.S. Department of Labor and the Internal Revenue Service to share information and coordinate law enforcement with the IRS and participating states in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.

“We are determined to protect a safety net for all working families and committed to building a level playing field for law-abiding business owners. That commitment drives our efforts to combat workplace fraud,” said Assistant Secretary Squire. “Our office conducts industry-directed audits to ensure that all employees have access to worker protections, including unemployment insurance benefits.”

Under the Workplace Fraud Act, it is a violation of law to fail to properly classify workers as employees, and it imposes penalties on those employers who knowingly misclassify their workers. The law also clarifies the definition of an independent contractor.

“We understand that some business owners and some elected officials feel that our department is targeting certain businesses and that we are burdening them with multiple audits and endless investigations. We’re sympathetic to that perception, but it’s not the reality,” said Commissioner DeJuliis. “The only business models that find the state’s and the federal government’s workplace fraud regulations difficult are business models that are playing by a different set of rules than all other businesses. We set up these sessions on the Eastern Shore to provide information and pledge our support to ensure that all businesses in Maryland are in compliance with state and federal regulations.”

DeJuliis and others also touted recent reports showing Maryland’s strong standing as a great state to do business, including an M&T Bank report listing the state as the 11th best state for business, a national study showing that Maryland has the highest per capita population of millionaires in the country and a study by the Center on Budget and Policy Priorities disputing the false charges that Maryland’s regulations and statutes have resulted in families and companies moving to other states.

The Maryland Workplace Fraud Act provides the state with tools to combat workplace fraud, which involves employers who knowingly misclassify their employees as independent contractors or do not classify them at all. This illegal practice allows employers to cut payroll costs significantly, leaving workers unprotected by critical workplace protection laws and creating a competitive disadvantage for those employers who play by the rules. Workers who are misclassified as independent contractors are denied access to unemployment insurance, workers’ compensation and other protections. Additionally, taxpayers are deprived of millions of dollars to the Unemployment Insurance Trust Fund and the State General Fund.

The Department of Labor, Licensing and Regulation protects and empowers Marylanders by safeguarding workers, protecting consumers, providing a safety net and cultivating a thriving workforce that can meet the demands of Maryland’s dynamic economy. Follow DLLR on Twitter (@MD_DLLR) and Facebook.