Division of Labor and Industry


Are You Complying with the Workplace Fraud Act? - Worker Classification Protection

Worker Classification Protection Are You in Compliance?  

Maryland's Workplace Fraud Act does not require that all construction and landscaping workers be classified as employees. Rather, the Act requires that work providers treat each worker in accordance with the worker's actual work status. If the worker is being classified as and treated like an independent contractor, then they must truly be an independent contractor: specifically, they must be "independent" of direction and control with regard to when and how they perform the work, and there must be a contract. Certain other requirements also apply.

While Maryland presumes that a worker in the construction or landscaping industry should be classified and treated as an employee, the Act actually sets forth four different ways in which a work provider might prove that a worker is not an employee.

  1. The worker might be an exempt owner/operator of an independent business.
  2. The work provider/worker relationship might satisfy the "ABC" test if:
    1. The worker is free from control and direction;
    2. The worker is customarily engaged in an independent business of the same nature; and
    3. The work is either:
      1. outside of the usual course of business of the work provider or
      2. performed off of the work provider's premises. (A job site does not count as part of the premises.)
  3. The work provider can contract with another business to outsource or subcontract the work provider's normal work.
  4. The work provider can contract with another business to outsource or subcontract any of the work provider's work.

Each of these four options has certain unique requirements. One requirement that all four options have in common is that the work provider must provide each worker with a written notice – in English and in Spanish – which tells the worker how being classified as a independent contractor or exempt person effects them with regard to things like taxes, worker's compensation and unemployment insurance.

Still not sure?

For a more detailed description of the legal requirements of the Workplace Fraud Act and the procedures utilized by the Worker Classification Protection Unit, please see the Complaint Process Flowchart. If you are still not sure how the Workplace Fraud Act applies to you or your business, you may contact the Worker Classification Protection Unit at (410) 767-9885 or dldliwcpu-dllr@maryland.gov, or you may wish to consult a business professional.

Worker Classification Protection Unit
Division of Labor and Industry

1100 North Eutaw Street, Room 607
Baltimore, Maryland 21201
Telephone: 410-767-9885