Oklahoma and The Feds Crack Down On Subcontractors

Oklahoma organizations that misclassify employees as independent contractors are the target of new legislation approved by the Oklahoma House of Representatives.

Senate Bill 1384 would allow the Oklahoma Tax Commission, the Oklahoma Workers' Compensation Court, and the Oklahoma Employment Security Commission. to share information in order to identify employers who fraudulently classify workers as independent contractors instead of employees in order to evade taxes and workers' compensation claims.

The Department of Labor announced that $12 million of its 2011 budget will go towards increasing enforcement of wage and overtime laws involving misclassification of employees. Currently misclassification is not against the law, but its practices often violate labor and tax laws, such as failing to pay employees overtime or minimum wage.

As I have posted often in the past, this does not mean that a company should not dispute the classification codes for their employees if they feel the codes are incorrect. Classification codes have very little to do with the misclassification of employees versus subcontractors. Those are two different subjects.