The federal government is partnering with the state of Florida to rout out contractors who are participating in a worker misclassification scheme.
By classifying permanent employees as independent contractors, companies have been avoiding withholding income tax or filing payroll taxes for these workers. These contractors also gain an unfair advantage of 20% or more in labor cost savings when competitively bidding on projects. The US Department of Labor has joined forces with the Florida Department of Revenue to put a stop to these tactics through shared information and coordinated law enforcement efforts. The Department of Labor has partnered with 16 other states towards eliminating this practice which is said to have cost the State of Florida $400 million in lost tax revenue.
