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NAGLO 2010

NAGLO 2010. Misclassified workers . History of (section 530) Safe harbor supposed to be temporary. Common industry practice Audit by the IRS Employer relied on advice from a lawyer or accountant . Proposed Legislation HR3408 (117 cosponsor) S2882(14 cosponsors).

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NAGLO 2010

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  1. NAGLO 2010 Misclassified workers

  2. History of (section 530) Safe harborsupposed to be temporary • Common industry practice • Audit by the IRS • Employer relied on advice from a lawyer or accountant

  3. Proposed Legislation HR3408 (117 cosponsor) S2882(14 cosponsors) • Corporate to corporate reporting • Self reporting to the IRS • Increase in fine schedule

  4. Fair Labor Standards Act BillsHR5107 and S3254 • Requires employers to keep records of use of independent contractors • Requires employers to notify the status of an employee or independent contractor at time of employment and at any change in status • Safeguards employee from reporting on misclassification violations • Doubles liquidated penalties • Social security administration required to do audit program • DOL and IRS requires communication of violations

  5. State Studies OHIO • The attorney general use 2005 unemployment data and found • 459,000 misclassified workers in tax year 2005 • Cost to the state • Unemployment insurance $100 million • Workers compensation $510 million • State income tax $180 million • Local income tax $100 million • Total state and local $890 million • Federal loss $500-$600 million SSI and Medicare • Another $500 million in federal income taxes

  6. What industries • Construction both commercial and residential • Trucking and small package delivery • Hospitality (Hotel maids) • Janitorial • Bartending • Night Watchman • Blackwater contract soldiers

  7. The Administrations Initiatives • $25 million to treasury, DOL and OSHA • It brings in $7.3 Billion in Revenue • $12 Million for 90 FTE to investigate (4,700 investigations annually. • $11.25 million in grants to State UI agencies for enforcement • $1.6 million for solicitor of labor enforcement • $150,000 for stronger OSHA

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