Iowa’s Misclassification Program Proves Successful
DES MOINES - Misclassification of workers as “independent contractors” rather than “employees,” is a growing problem in Iowa and across the nation. In September 2009, Iowa launched a misclassification unit tasked with educating the business community on the issues of employee misclassification and to properly investigate those suspected of improperly classifying their workers. To date, efforts related to misclassification have uncovered:
• 116 employers misclassified 887 workers,
• Total unreported wages were $15,520,738,
• Total unemployment taxes due are $555,647, and
• Total unemployment penalties and interest due are $156,248.
Collaborative efforts between unemployment insurance, contractor registration and workers’ compensation have aided the investigative efforts of Iowa’s misclassification activities.
“Employers that improperly classify their workers as independent contractors create an unfair playing field by lowering their costs of doing business in comparison to employers who follow the law in Iowa,” stated Iowa Workforce Development Director Elisabeth Buck. “Additionally, misclassified workers are denied access to workers’ compensation coverage and unemployment benefits if needed, creating the potential for a greater economic burden to communities.”
Misclassification of workers in Iowa threatens the economy, its businesses and workers. By continuing to educate Iowa’s business community and working together to identify those employers who incorrectly classify their employees, Iowa can develop a business climate that is competitive and fair for all employers and employees. Information on Iowa’s misclassification program is available at www.iowaworkforce.org/misclassification.