US Departments of Labor, Housing and Urban Development sign partnership to reduce employee misclassification in six western states

DENVER – Officials from the U.S. Department of Labor and the U.S. Department of Housing and Urban Development signed a Memorandum of Understanding to help stop the misclassification of workers in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming.

The first MOU of its kind represents a new effort on the part of the agencies to work together to protect employee rights and level the playing field for responsible employers by reducing the practice of misclassification.

In Fiscal Year 2015, the department’s Wage and Hour Division recovered more than $74 million in back wages for more than 102,000 workers in industries, such as janitorial, food, construction, daycare, hospitality and garment. The division regularly finds low-wage workers are victims of misclassification.

“The Wage and Hour Division stands together with the U.S. Department of Housing and Urban Development to protect workers and responsible employers and ensure everyone has the opportunity to succeed,” said Dr. David Weil, administrator of the Wage and Hour Division. “Misclassification deprives workers of rightfully earned wages and undercuts law-abiding businesses.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two agencies seek to protect the wages, safety, and health of America’s workforce by sharing information.

“In recent years, our division has worked with partners like HUD to address the problem of employee misclassification in the construction industry,” said Betty Campbell, the Wage and Hour Division’s regional administrator for the Southwest. “The MOU we announce today allows us to work more closely to educate workers and employers and improve compliance in the industry.”

“Region 8 is proud to strengthen our partnership and collaboration with the U.S. Department of Labor,” said HUD Regional Administrator Rick M. Garcia. “With all the complexities of labor laws and labor standards impacting new residential construction today, working closely with the department provides our customers and our staff with more efficient and effective means for success.”

While legitimate independent contractors are an important part of the national economy, misclassification of employees is a serious problem. Workers misclassified as independent contractors are often denied access to critical benefits and protections, such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance, to which they are entitled. In addition, misclassification cheats law-abiding business owners, who often find it difficult to compete with those who are skirting the law. More information is available on the Department of Labor’s misclassification website at http://www.dol.gov/misclassification/.

To learn more about the FLSA’s requirements, call the Wage and Hour Division’s toll-free hotline at 866-4US-WAGE (487-9243) or visit its website at http://www.dol.gov/whd/.