Tuesday, June 24, 2008
Massachusetts to Target Enforcement of Employee Mis-classification
I blogged on June 10, 2008 on the risks household employers run when they pay their nanny or housekeeper 'under the table.' Massachusetts recently announced an enforcement initiative that will attempt to crack down on "the underground economy of workers being paid in cash, not getting overtime, or being unlawfully called "independent contractors," according to a report in The Republican ( Springfield, MA ). These practices cost the state "$100 million in unpaid income tax payments and another $100 million in unpaid workers compensation each year, according to a Harvard study."
The Massachusetts State Department of Labor has established the Joint Task Force on the Underground Economy and Employee Misclassification. The task force is tasked with "working to bring those employers who skirt the laws of the Commonwealth into compliance" according to the agency website.
Nannies and other household workers such as housekeepers and maids are employees of the household they work for. According to IRS estimates, 70 - 80% of families employing these workers either mis-classify the worker as an 'independent contractor' or completely pay the worker under the table. This costs the Federal and state governments tens of millions of dollars annually from household employment alone, as well as robbing these workers of their eligibility for unemployment benefits when the job ends.
More information about the classification of household employees such as a nanny, as well as tax and labor laws that apply to these workers can be found in the HomeWork Solutions' Frequently Asked Questions.
The Massachusetts State Department of Labor has established the Joint Task Force on the Underground Economy and Employee Misclassification. The task force is tasked with "working to bring those employers who skirt the laws of the Commonwealth into compliance" according to the agency website.
Nannies and other household workers such as housekeepers and maids are employees of the household they work for. According to IRS estimates, 70 - 80% of families employing these workers either mis-classify the worker as an 'independent contractor' or completely pay the worker under the table. This costs the Federal and state governments tens of millions of dollars annually from household employment alone, as well as robbing these workers of their eligibility for unemployment benefits when the job ends.
More information about the classification of household employees such as a nanny, as well as tax and labor laws that apply to these workers can be found in the HomeWork Solutions' Frequently Asked Questions.
