TOPEKA — Governor Laura Kelly and the Kansas Department of Labor (KDOL) announced on Wednesday actions and highlighted resources to prevent worker misclassification, which occurs when an employer incorrectly classifies workers as independent contractors rather than employees. KDOL’s Unemployment Insurance Tax/Employer division is hiring additional auditors to continue its work to prevent, detect, and investigate this type of fraud. The agency will also raise public awareness by sharing educational materials on social media.
“Worker misclassification is an issue of fairness to workers, who deserve benefits they’ve rightfully earned, and to the honest businesses that do right by their employees,” Governor Laura Kelly said. “That’s why my administration is taking these steps to protect hardworking Kansans and ensure every business follows the law.”
Kansas employers are required to report wages to the Department of Revenue and the Department of Labor for the purposes of withholding tax, unemployment tax, and workers’ compensation. The intentional misclassification of workers is illegal and constitutes tax and insurance evasion.
Gainfully employed people should be afforded economic stability and security at a workplace where they are treated with fairness and respect. Unfortunately, these allowances are in jeopardy when businesses unjustifiably classify employees as independent contractors. To protect workers and taxpayers, Kansas law imposes penalties against employers who intentionally misclassify a worker as an independent contractor to avoid paying these taxes.
Misclassified workers lose essential protections and rights they would otherwise be entitled to in a traditional employee/employer relationship, including minimum wage requirements, overtime pay, workers’ compensation, unemployment insurance, and anti-discrimination laws. Not only is worker misclassification detrimental to business, workers, and their families, but the financial impacts on Kansas are significant.
“Worker misclassification can lead to unfair competition among law-abiding businesses. A business that attempts to defraud the system cheats workers of vital benefits and adversely affects other businesses,” Labor Secretary Amber Shultz said.
Below are additional ways Kansans can help combat misclassification:
Employers: For information about correctly classifying workers, refer to KDOL’s Employer Toolkit at www.dol.ks.gov/employers or call 785-296-5027.
Employees: Concerns or tips regarding misclassification can be reported by email toKDOL.uitax@ks.gov or by phone at 785-296-5027.
To learn more about worker misclassification, visitwww.dol.ks.gov/employers and click Worker Misclassification.
