North Carolina Governor Pat McCrory signed an executive order Dec. 18 to crack down on employee misclassification practices in the state. Executive Order 83 establishes the Employee Classification Section within the North Carolina Industrial Commission to streamline information sharing and facilitate enforcement actions amongst Cabinet agencies and the Council of State.
The order directs the chairman of the Industrial Commission to appoint a director to oversee the new section’s activities. The director will serve as the primary point of contact for reported instances of employee misclassification and will refer all reported instances to the relevant state agencies for investigation and enforcement action.
McCrory has directed the Department of Revenue, the Industrial Commission, and the Division of Employment Security to each appoint a liaison to work directly with the director to ensure the proper enforcement actions are taken and the agencies are sharing all necessary information. The executive order also provides an opportunity for improved coordination and collaboration between the new Employee Classification Section and the Department of Labor and Department of Insurance.
“When unethical employers improperly classify their employees as independent contractors, they not only put our state’s workforce at risk, but also put ethical businesses at a competitive disadvantage and rob taxpayers of significant revenues,” McCrory said. “The Employee Classification Section will work with other state agencies to ensure that every potential violation of our state’s laws will be thoroughly investigated.”