Recently, the U.S. Department of Labor announced awards of $10,225,183 in grants to 19 states to implement or improve worker misclassification detection and enforcement initiatives in their unemployment insurance programs.   California, Delaware, Florida, Hawaii, Idaho, Indiana, Maryland, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oregon, South Dakota, Tennessee, Texas, Utah, Vermont, and Wisconsin all received grants of up to $500,000 each, with Maryland, New Jersey, Texas, and Utah each receiving shares of an additional $2 million in grant funds as a part of an innovative bonus program.   This “bonus” was awarded to those states with “high performance or most improved performance in detecting incidents of worker misclassification.”

This marks the first time the DOL has awarded grants to states dedicated to curbing misclassification.  However, the DOL’s stepped up enforcement of worker misclassification has been ongoing for several years and cooperation between the DOL and state agencies is nothing new.  For example, several states, including California and New York, have entered into formal Memoranda of Understanding with the DOL to share information regarding independent contractor misclassification, opening employers up to both federal and state liability from a single investigation.

These grants show that the DOL and state governments’ interest in worker misclassification is not waning.  Employers who have not already closely reviewed their independent contractor relationships should consider performing a privileged audit in order to assess the risk they may have of misclassification claims.

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Photo of Guy Brenner Guy Brenner

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member…

Guy Brenner is a partner in the Labor & Employment Law Department and leads the Firm’s Washington, D.C. Labor & Employment practice. He is head of the Government Contractor Compliance Group, co-head of the Counseling, Training & Pay Equity Group and a member of the Restrictive Covenants, Trade Secrets & Unfair Competition Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues, medical and disability leave matters, employee/independent contractor classification issues, and the investigation and litigation of whistleblower claims. He assists employers in negotiating and drafting executive agreements and employee mobility agreements, including non-competition, non-solicit and non-disclosure agreements, and also conducts and supervises internal investigations. He also regularly advises clients on pay equity matters, including privileged pay equity analyses.

Guy advises federal government contractors and subcontractors all aspects of Office of Federal Contract Compliance Programs (OFCCP) regulations and requirements, including preparing affirmative action plans, responding to desk audits, and managing on-site audits.

Guy is a former clerk to Judge Colleen Kollar-Kotelly of the US District Court of the District of Columbia.