Simultaneous with the launch of the IRS’s new initiative on worker misclassification, Attorney General Martha Coakley’s Office announced, just this past week, that it reached settlements in four separate misclassification cases. In each of these cases, the Attorney General’s Office claimed that restaurant delivery companies had misclassified their drivers as independent contractors when they should have been classified as employees. Because of this misclassification, the Attorney General’s Office opined that these workers were deprived of certain wage/hour protections as well as other benefits that employees enjoy, such as unemployment insurance, workers’ compensation benefits and health insurance.
Beginning last June and continuing into the present, the Fair Labor Division of the Attorney General’s Office has ramped up its enforcement efforts, particularly with regard to misclassification. Specifically, the Attorney General’s Office has targeted various meal delivery companies in Massachusetts, focusing their investigations on the companies’ classification of workers.
The companies under investigation may have decided to settle their cases with the Attorney General’s Office to avoid the extremely steep penalties misclassification creates. Indeed, misclassification leads to the automatic imposition of triple damages under the Massachusetts Wage Act regardless of whether it was deliberate or accidental.
To read the AG’s full press release, click here.
Tags: Attorney General's Office, independent contractors, IRS, Martha Coakley, Massachusetts, Massachusetts Wage Act, wage/hour, worker misclassification