Frequently Asked Questions for Workers

• What is Workplace Fraud?
• How do I know if I have been properly classified in the workplace?
• If I believe I have been misclassified as an independent contractor and should be entitled to unemployment insurance benefits, what should I do?

Q: What is Workplace Fraud?
A: Workplace Fraud occurs when an employer fails to properly classify workers as "employees," even when those workers legally should be classified as "employees," rather than as independent contractors, for example. When a worker is misclassified in this manner, they lose access to critical workplace protections that are guaranteed only to employees, including workers' compensation and unemployment insurance benefits. The practice allows employers to cut their payroll costs by up to 30 percent, undercutting law-abiding employers and depriving taxpayers of critical revenue.

Q: How do I know if I have been properly classified in the workplace?
A: Maryland uses the ABC test to determine whether a worker is an employee or an independent contractor. The ABC test is a three pronged test, under which an employer-employee relationship is presumed unless the individual performing the work is a exempt person or the employer demonstrates that:

1. The individual is free from control and direction;
2. The individual customarily is engaged in an independent business of the same nature; and
3. The work is outside of the usual course of business of the employer or performed outside of any place of business of the employer.
   Work is "outside the usual course of business" if the individual: 1) performs the work off the employer's premises; 2) performs work that is not integrated into the employer's operation; or 3) performs work unrelated to the employer's business.

Q: If I believe I have been misclassified as an independent contractor and should be entitled to unemployment insurance benefits, what should I do?
A: You can contact the unemployment insurance division by e-mail at uifieldinvestigation@dllr.state.md.us. You can also fax your information to 410-767-2612. All information will be treated as confidential.

Updated May 29, 2009