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Vermont Joins the U.S. Department of Labor to Battle Worker Misclassification

The U.S. Department of Labor (U.S. DOL) and the Vermont Department of Labor signed an agreement this summer to protect employees and law-abiding businesses by reducing the practice of worker misclassification in Vermont.  The three-year Memorandum of Understanding (MOU) allows the two agencies to share information and work together to conduct investigations and enforce the laws against employers identifying their employees as independent contractors or designating them with other non-employee statuses.

Agencies from several other states have signed similar agreements with the U.S. DOL including agencies from Alabama, Alaska, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Idaho, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Rhode Island, Texas, Utah, Washington, Wisconsin, and Wyoming.

The agreement was signed by David Weil, U.S. DOL Wage and Hour Division Administrator, and by Annie Noonan, Vermont Department of Labor Commissioner.   Following the signing, Weil released the following statement:

“Misclassification deprives workers of their hard earned wages and undercuts businesses that follow the law.  This agreement sends a clear message that we are standing together with the state of Vermont to protect workers and responsible employers.”

Noonan remarked:

“The misclassification of employees is prohibited by both federal law and Vermont state law.  Misclassification undermines law-abiding businesses by creating an unfair advantage for non-compliant businesses when competing or bidding for work.  Employees are adversely impacted when benefits such as minimum wage, overtime, family and medical leave, unemployment insurance, and workers' compensation are denied them because they are misclassified as independent contractors.  I look forward to working closely with the U.S. Department of Labor to address this problem.”

It is interesting to note that the map showing states which have signed these agreements with the U.S. DOL and the map of states which have enacted state laws specifically dealing with wage theft and/or worker misclassification do not match.  Legislators clearly do not agree about the best way to handle these practices that have been called a “cancer” to construction and other industries.