The New York State Joint Enforcement Task Force on Employee Misclassification identified nearly 26,000 instances of employee misclassification, nearly $316 million in unreported wages, and nearly $8.8 million in unpaid unemployment insurance contributions, according to a report released last week.
In addition to the join investigations, the NY Department of Labor completed more than 1,800 fraud investigations discovering more than $264 million in unreported wages and nearly $7.2 million in unemployment insurance contributions due.
For the purposes of the task force, employee misclassification includes those who are incorrectly classified as independent contractors, with their earnings reported via form 10999, as well as those who are paid “under the table” and not reported at all.
Five cases were referred for possible criminal charges, according to the report.
The task force was first formed in 2007 by an executive order issued by then-Gov. Eliot Spitzer. It has been re-authorized by each administration since. The task force includes:
- The New York State Department of Labor including the Unemployment Insurance Division, the Division of Labor Standards, the Division of Safety and Health, the Office of Special Investigations and the Bureau of Public Work;
- The New York State Workers’ Compensation Board;
- The New York State Workers’ Compensation Fraud Inspector General;
- The New York State Department of Taxation and Finance;
- The New York State Attorney General’s Office; and
- The Comptroller of the City of New York.
The JETF’s efforts come from anonymous calls made to a fraud hotline as well as e-mailed or mailed tips. Referrals that come in through the data-sharing processes set up with other government agencies are also reviewed.
In addition to the substantial loss of revenue, the executive order establishing the task force said misclassification harms New Yorkers by giving businesses that misclassify their employees an improper competitive advantage over law-abiding businesses and depriving vulnerable workers of protections and benefits.