Federal, state governments review owner-operator status
On Feb. 23, Louisiana became the 13th state to sign a memorandum of understanding with the U.S. Department of Labor to detect and remedy employee misclassification.
California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington have signed these partnerships since the department began the initiative in September.
Also last month, the IRS began the Voluntary Classification Settlement Program, which allows small businesses that have misclassified employees as independent contractors to correct this by reclassifying and paying employment taxes without penalties or interest.
Some state trucking organization representatives have said they do not necessarily recommend carriers enroll in the IRS program, but it could be helpful to some companies.
The U.S. Department of Labor released its 2013 budget request Feb. 13, which included $14 million to combat misclassification. That included $10 million for state grants to pursue this endeavor, after having promised to “redouble its efforts to combat worker misclassification” this year by pouring millions into a multi-agency initiative to fund these state grants.