Kansans act to stop misclassification!

The following is a press release issued by the Governor of Kansas, Kathleen Sebelius. There is a link towards the bottom of the page that will take you to the new website Kansas has started to explain the issue, and even make an anonymous report if you have been misclassified as an independent contractor, or you have information about someone you suspect is misclassifying workers.

For immediate release:

July 10, 2006

Sebelius announces campaign to ensure fairness

for Kansas workers and businesses

State agencies cooperate to prevent misclassification of workers

Workers and businesses are winners when employees are properly classified, which is why Kansas is launching a public education campaign this month designed to prevent the misclassification of workers as independent contractors.

Governor Kathleen Sebelius says the campaign will be a joint effort of the Kansas Department of Revenue and Kansas Department of Labor and is designed to benefit law-abiding employers and employees.

“The vast, majority of businesses and workers are playing by the rules, and they shouldn’t foot the bill for the few employers who do evade the law. Cracking down on law-breakers and educating them about the consequences of misclassifying workers will benefit those who are following the law,” said Sebelius.

Worker misclassification occurs when an employer incorrectly classifies workers as independent contractors rather than employees. Consequently, employers may not make appropriate withholdings or tax payments for their employees. This shifts the burden onto law-abiding businesses and workers, which is why intentional misclassification of workers is illegal and constitutes tax and insurance evasion.

The 2006 Legislature passed, and Sebelius signed, a bill authorizing a penalty for the intentional misclassification of an employee as an independent contractor to avoid state withholding taxes or unemployment insurance taxes.

The bill, HB 2772, also authorizes the Department of Revenue and the Department of Labor to share information on those suspected of intentionally misclassifying employees. It allows for more collaboration between the two agencies in investigating these matters, which should dramatically enhance enforcement.

The new law went into effect on July 1. To help businesses understand the proper way to classify workers, the two departments will kick off the public education campaign at noon on July 13 at the Junction City Chamber of Commerce. Additional workshops will be scheduled in Wyandotte and Johnson Counties in the near future. Agents will start enforcing the new law in August.

“Often, worker misclassification occurs unintentionally and we want to help businesses stay within the law,” said Sebelius. “With these new resources, we will help protect Kansas businesses and workers.”

Working together, the two agencies have launched a Web site at www.kdor.org/misclass giving Kansans a place to report potential misclassification issues. The agencies will jointly investigate all tips provided through the site.

# # #