Louisiana Is Cracking Down on Employee Misclassification

Date: December 06, 2017



Louisiana employers, take note: In 2018, the Government Against Misclassified Employees Operational Network (GAME ON) task force is ramping up its efforts to identify the misclassification of employees as independent contractors.


This task force is made up of representatives from the Louisiana Workforce Commission’s (LWC) Unemployment Insurance and Office of Workers’ Compensation divisions as well as the Louisiana Department of Revenue. They are also cooperating with the IRS and U.S. Department of Labor’s Wage and Hour Division. The group has been at work for several years, and in 2015 alone they discovered what they considered to be 20,000 cases of misclassified workers in Louisiana, which amounts to $101 million in unreported wages.


Industries under special scrutiny are those that, historically, are known to use a lot of independent contractors, including construction, healthcare, hospitality, personal services, and staffing companies. Companies found to have willfully misclassified employees as independent contractors will have to pay taxes on the unreported wages, pay penalties of up to $1,000 per misclassified employee, and face potential imprisonment and barring from receiving state or government contracts.


The task force may audit company records as far back as four years, and in 2018, the LWC is implementing audit software with built-in analytics that help identify potential problem companies and that will streamline the audit process.


To be sure your company isn’t unintentionally misclassifying workers, check out NFIB’s guide to distinguishing between employees and independent contractors.

Related Content: Small Business News | Economy | Louisiana

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