The US Department of Labor and the Vermont Department of Labor have signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. Under the agreement, both agencies may share information and coordinate law enforcement.

The MOU is a combined federal and state effort to protect the employees’ rights and level the playing field for responsible employers by reducing the practice of misclassification. Vermont joins 25 other states. 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 agencies.

“Misclassification undermines law-abiding businesses by creating an unfair advantage for non-compliant businesses when competing or bidding for work,” said Annie Noonan, Vermont Department of Labor commissioner. “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.”