Independent Contractor vs Employee–Another Round–Rhode Island

Misclassification of workers as independent contractors instead of employees is a nationwide problem facing not only the IRS but all 50 states.  A recent audit by the nonpartisan National Employment Law Project (NELP) looked at agency audits in 25 states and found that 10 to 30 percent of employers misclassify their employees as independent contractors.  And it could actually be higher than that.  That equates to several million workers nationally being misclassified. This results in billions of lost tax revenue and millions of workers without wage and hour or other protections.  So now the states are starting to take the matter seriously. In my October 16th blog I wrote about Alabama beginning to crack down. Now it is Rhode Island’s turn in the ring. As part of a six-agency task force the Rhode Island Division of Taxation has set up an anonymous telephone tip line to receive allegations of worker misclassification. The chairman of the Joint Task Force on the Underground Economy and Employee Misclassification is the Department of Labor and Training Director, Charles J. Fogarty. The tax fraud tip line is staffed by the Division of Taxation. The tip number is 401.574.TIPS or 401.574.8477.

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