Labor Department Expands Efforts To Uncover Employer Fraud

Thursday, June 5, 2014

The Workers’ Compensation Division of the Tennessee Department of Labor & Workforce Development has put into place new procedures to identify employers who engage in payroll fraud such as intentionally misclassifying workers as independent contractors, failing to report all wages paid, misrepresenting the kind of work performed, or paying workers “under the table.” These practices are typically used to avoid paying workers’ compensation and unemployment insurance tax premiums. 

“We are working aggressively to stop misclassification fraud by employers. When these unethical practices are identified, the Division of Workers’ Compensation of the Department of Labor & Workforce Development will assess administrative penalties for misclassification as well as refer cases for prosecution,” said Administrator for Workers’ Compensation Abbie Hudgens. 

The Employee Misclassification Advisory Task Force made recommendations that led to legislation to improve the state’s efforts to reduce misclassification fraud. The Department of Labor entered into a settlement that assessed a penalty of more than $300,000 against a drywall contractor who materially understated his payroll to his insurance carrier. The settlement is the largest ever of the department’s Employee Misclassification Education and Enforcement Fund. 

The Employee Misclassification Advisory Task Force, created by the General Assembly in 2010, made recommendations that led to legislation to improve the state’s efforts to reduce misclassification fraud. 

The Task Force submitted three annual reports to the Legislature – the latest on January 30. The following are among actions taken by the department based on Task Force recommendations. 

§  Establish a referral process for possible criminal prosecution:

Workers’ Compensation has referred cases to the Tennessee Bureau of Investigation or the appropriate District Attorney General for any action deemed necessary under any applicable criminal law. 

§  Hire additional investigators:

Three investigators, one of whom is bilingual, have been hired under the legislation since July 2013.

 §  Procure fraud detection software:

The Workers’ Compensation Division is in the last phase of acquiring this software. 

§  Launch a public awareness initiative:

o    The Workers’ Compensation division began a speaking tour in the summer of 2013 in which representatives from the division and the Tennessee Department of Commerce and Insurance spoke at conferences and other venues across the state. These speakers continue to be available for future presentations.

o    The division created a Website that provides useful distinctions between employees and independent contractors.

o    The division offers a toll-free number, 800/332-2667, and a tip form, for citizens to report a business suspected of misclassifying its workers. 

Although the Employee Misclassification Advisory Task Force is scheduled to sunset on June 30, most of the current task force members have agreed to participate on a new Employee Misclassification Advisory Committee.


State Representative Kevin Brooks Encourages Residents To Utilize Annual Sales Tax Holiday

With the beginning of a new school year right around the corner, State Representative Kevin Brooks is encouraging the families who live in House District 24 to utilize the state’s annual sales tax holiday to save on items such as clothing, school and art supplies, as well as computer purchases.   The state’s annual Tax Free Weekend is set for July 28-30. It begins at 12:01 ... (click for more)

Photo Gallery: Pinnacle Financial Partners Opens New Office On Shallowford Road In East Hamilton County

Pair Arrested In Connection With Lookout Mountain Vehicle Thefts, Break-Ins

Police on Lookout Mountain said two arrests have been made tied to the theft of  two vehicles stolen from a home in Lookout Mountain, Ga., last week.   In connection to the vehicle thefts, seven other vehicles were entered and several items were stolen. Lookout Mountain, Ga., Chief Todd Gann said, "Early  Wednesday  morning, a Georgia resident noticed ... (click for more)

Get Emailed Headlines From Chattanoogan.com; Like Us On Facebook, Twitter For Instant News

We send out headlines each day of the latest Chattanooga news. Our news headlines have links that take you to the stories with a click. We also send out special emails if there is a highly significant local news story breaking so you will be aware of it quickly. To be added to the email headline list, just email us at news@chattanoogan.com In addition, like us on Facebook ... (click for more)

Do Something To Protect Our Children

It is unconscionable in this day and age that these children had to exist in such deplorable conditions and that an innocent baby suffered and died alone in a locked car.  Yes, there is blame and accountability considering this family had child neglect charges filed a few years ago (that were apparently dropped and expunged) and a large part of the responsibility should ... (click for more)

Roy Exum: My Dear Friend Jake

Two weeks ago four of us piled in a car to go down to Canton, Ga., so we could tell Jake Butcher goodbye. Bob McKamey, former mayor Ron Littlefield, a dazzling guy named Steve Wilson, and myself. This would be the last time any of us would see Jake. It was a spectacular day and anyone who doesn’t believe in such goodbyes is missing out on the greatest moment in their life. It is ... (click for more)