Article 'Feds Vow Crackdown on Misclasified Staff'

The March 1st issue of ENR Engineering News-Record has an article which says how the Obama administration has tasked the Dept.; of Labor and the IRS with increasing enforcements this year and is calling for additional resources in the 2011 Federal budget. Last year, the Dept. of Labor added 250 new investigators hired within its Wage & Hour Division. The IRS BUDGET, signed by the President in December, strongly urges the IRS to increase enforcement “in industries where misclassification of employees is widespread.”

The proposed 2011 budget calls for additional resources for enforcement, including $12 million to hire 90 additional enforcement staffers at the Dept. of Labor. The Obama administration’s budget estimates these efforts could yield $7 Billion in additional Treasury receipts in 10 years.
The 2009 budget - $17 million – to hire an additional 75 employees.
The 2010 budget - $32 million – to hire an additional 288 employees.
A proposed additional 2010 budget – to hire an additional 100 more employees.

It is estimated that up to 30% of firms misclassify employees as independent contractors.
Between 1996 and 2004, an estimated $34.7 billion of federal tax revenues went uncollected due to worker misclassification, according to a Coopers & Lybrand Study.