Worker misclassification group scrapped
Gov. Paul LePage has scrapped a task force established in 2009 to study worker misclassification.
LePage on Thursday signed an executive order abolishing the task force, created by former Gov. John Baldacci to study and discourage employers from misclassifying employees as independent contractors to avoid paying workers' compensation and payroll taxes. LePage told Capitol News Service he is also submitting legislation to use the federal definition of an employee for state purposes to simplify various state standards. The order said "there is no need for a task force, an extra layer of bureaucracy," and that the "existence of the task force...has created uncertainty within the business community." Several bills related to employee classification have been submitted, and the Labor, Commerce, Research and Economic Development Committee will discuss the issue.
The Maine State Building and Construction Trades called the order "an affront to working families" and said it would cost taxpayers millions in uncollected tax revenues, workers' compensation and unemployment insurance, according to a press release. The Maine Department of Labor estimates that the state loses as much as $36 million a year in tax revenues from worker misclassification, according to Capitol News Service, and in 2009, 17% of companies audited by the state misclassified workers, Mainebiz reported.
For more on the issue, see "Seeking an upgrade."
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