The Virginia Employment Commission signed a three-year memorandum of understanding with the US Department of Labor’s Wage and Hour Division to prevent improper independent worker classifications.

Per the agreement, the two agencies will work together to work to educate employers, employees and other stakeholders; share resources; and coordinate during investigations.

“Labeling employees as something they are not — such as independent contractors — can deny them basic rights such as minimum wage, overtime and other benefits,” according to the Department of Labor.

Misclassification also reduces federal and state government tax revenue as well as state unemployment insurance and workers’ compensation funds.