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Connecticut Comes Down Hard on Companies That Misclassify Workers

While lawmakers in Texas this year took a pass on a broad crackdown on companies that misclassify their workers, other states are ramping up their efforts.

In Connecticut, for example, the state issued Stop Work orders to nearly 30 companies found to have been misclassifying their workers. The Connecticut Department of Labor says that they issued these Stop Work orders and slap penalties on companies that misclassify workers as independent subcontractors "with the intent of avoiding their obligations under federal and state employment laws covering such matters as workers' compensation, unemployment taxes and payroll reporting.

The civil penalty for misclassification in Connecticut is $300 per worker for each day the employer does not carry workers' compensation as required by state law.

While those numbers are significant, here's the real windfall from the state's efforts to deal with misclassification: $28 million will now be included for unemployment insurance tax purposes.

You can see the list of companies that were issued Stop Work orders here.


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