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A new report from Maryland’s Joint Enforcement Task Force on Workplace Fraud (JETF) has uncovered widespread worker misclassification in the state, affecting thousands of employees. The findings highlight significant financial and legal consequences for workers, businesses, and the state, as misclassified employees lose access to essential protections such as unemployment benefits, workers’ compensation, and overtime pay. The report also details how workplace fraud disadvantages compliant businesses and reduces tax revenues needed for public services.

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In 2024, enforcement actions by Task Force agencies identified over 5,500 misclassified workers and more than $36 million in unreported taxable wages through unemployment insurance audits. The report emphasizes that misclassification allows some employers to lower labor costs unfairly, creating an uneven playing field. This practice shifts financial burdens to workers and taxpayers while reducing state funding for critical services.

Maryland Attorney General Anthony Brown stated that workplace fraud harms not only affected workers but also law-abiding businesses and the state economy. The report includes testimony from workers and employers, demonstrating the broader impact of these illegal labor practices. Maryland Secretary of Labor and Taskforce Chair Portia Wu reinforced the importance of combating workplace fraud to support fair wages and economic stability for all Marylanders.

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The JETF, re-established by Governor Wes Moore in January 2024, coordinates investigations across multiple agencies to enhance enforcement efforts. The nine-member task force includes Attorney General Brown, Comptroller Brooke E. Lierman, and Secretary Wu. Comptroller Lierman emphasized the need for strong enforcement measures to protect workers and ensure businesses adhere to legal standards.

The full report is available on the Maryland Department of Labor’s website. Workers who suspect they have been misclassified can contact the Division of Labor & Industry at workrights@maryland.gov. Employers found in violation may face investigations, penalties, and requirements to pay restitution, back taxes, and unemployment insurance contributions.

Article by multiple RFHC contributors.


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