New York State Enforcement Sweeps Net $19 Million in Unreported Wages

Enforcement Sweeps ID 2,078 Misclassified Workers in New York State

Posted on 16-Feb-08 by The Timekeeper

Hat tip to Jonathan Tasini at Working Life for bringing this to my attention:

From the New York Times, Feb. 12:
Dozens of Companies Underpay or Misreport Workers

Back in September, New York Governor Eliot Spitzer set up a task force to crack down on companies that illegally classify employees as independent contractors. This is a frequent ploy used by unscrupulous employers to avoid paying unemployment insurance taxes and workers’ comp.

Recently state investigators conducted a series of 15 enforcement sweeps, covering 117 companies, primarily in the construction and restaurant industries. Investigators were looking not only for misclassified workers, but also off-the-books work.

And boy did they find what they were looking for! According to the NY Times, they found $19 million in unreported wages, $3 million in underpayments to workers, and nearly $1 million in unpaid unemployment insurance fund taxes. In many cases, state officials will assess penalties as well as the back wages and taxes, so this could turn into an expensive lesson for those employers found in violation.

According to the state’s labor commissioner, M. Patricia Smith, the state plans more sweeps to look at not just the construction and restaurant industries, but also at car washes, janitorial firms and trucking companies.

If you’re an employer in New York state, it might be wise to ensure all your employees are classified correctly and that you’re paying all the appropriate taxes. The state of New York is watching.