Download - 2013 Joint Enforcement Task Force on the Underground Economy and Employee Misclassification
COMMONWEALTH OF MASSACHUSETTSDeval L. Patrick, GovernorRachel Kaprielian, Secretary, Executive Office of Labor and Workforce Development
2013
Annual Report
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification
1-877-96-LABOR www.mass.gov/lwd/jtf
Report Submitted by: Heather Rowe,
Director, Joint Task Force
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Heather Rowe, Director, Joint Enforcement Task Force Director, Department of Labor Standards
July, 2014
Dear Governor Patrick:
On behalf of the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification, we are pleased to present you with the Task Force’s 2013 Annual Report.
In March of 2008, you signed Executive Order #499, establishing the Commonwealth’s Joint Enforcement Task Force on the Underground Economy and Employee Misclassification to address the challenge of employer fraud and worker misclassification. We are grateful for your leadership and vision in providing an opportunity for state agencies and constitutional offices to work collaboratively to ensure full compliance with the Commonwealth’s labor, licensing, and tax laws.
Now in our sixth year, the keys to the success of the Task Force remain agency cooperation, information and efficient use of resources to uncover and remediate violations as well as educate the public. Following these guiding principles, Task Force member agencies are now functioning as a collective force, working smarter in the fight to combat the underground economy.
We would like to take this opportunity to thank the designated representatives to the Task Force from our executive branch member agencies, as well as the Office of the Attorney General’s Fair Labor Division, the Office of the Treasurer’s Alcoholic Beverages Control Commission, Office of the Secretary of the Commonwealth, and the Insurance Fraud Bureau for their ongoing contributions. Through this partnership, we are helping to restore fairness in our economy by leveling the playing field for law-abiding employers and protecting workers and the interests of taxpayers in the Commonwealth.
This Annual Report details the works of the Task Force during 2013, including a breakdown of the funds recovered through the Task Force and summaries of each member agency’s participation in addressing Task Force referrals and violations. The report also describes current initiatives to increase the volume and impact of our joint enforcement.
The Task Force is committed to building on our efforts to date to deliver greater enforcement and education, and we look forward to continued success.
Sincerely,
Rachael Kaprielian,
Secretary, Executive Office of Labor and Workforce Development
THE COMMONWEALTH OF MASSACHUSETTSEXECUTIVE OFFICE OF LABOR AND WORKFORCE DEVELOPMENT
JOINT ENFORCEMENT TASK FORCE ON THE UNDERGROUND ECONOMY
AND EMPLOYEE MISCLASSIFICATION
ONE ASHBURTON PLACE • 21st FLOOR • ATTENTION: JTF • BOSTON, MA 02108TEL: 877-96 LABOR (877-965-2267)
www.mass.gov/lwd/jtf
DEVAL L. PATRICKGOVERNOR
RACHEL KAPRIELIANSECRETARY
HEATHER ROWEDIRECTOR
JOINT ENFORCEMENT TASK FORCE
Letter to Governor Deval Patrick from Secretary Rachel Kaprielian and JTF Principal Members
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Definitions of Abbreviations ABCC: Alcoholic Beverages Control Commission
AGO-FLD: OfficeoftheAttorneyGeneral-FairLaborDivision
COMMCORP: CommonwealthCorporation
DAS: DivisionofApprenticeStandards
DCAMM: DivisionofCapitalAssetManagementandMaintenance
DIA: DepartmentofIndustrialAccidents
DLS: DepartmentofLaborStandards
DOB: DivisionofBanks
DOR: DepartmentofRevenue
DPH: DepartmentofPublicHealth
DPL: DivisionofProfessionalLicensure
DPS: DepartmentofPublicSafety
DUA: DepartmentofUnemploymentAssistance
EOLWD: ExecutiveOfficeofLaborandWorkforceDevelopment
FSC: FairShareContribution
IFB: InsuranceFraudBureau
JTF: JointEnforcementTaskForceontheUnderground EconomyandEmployeeMisclassification
MCAD: MassachusettsCommissionAgainstDiscrimination
MOBD: MassachusettsOfficeofBusinessDevelopment
MORI: MassachusettsOfficeforRefugeesandImmigrants
NLRB: NationalLaborRelationsBoard
OSBE: OfficeofSmallBusinessandEntrepreneurship
SDO: SupplierDiversityOffice
SOC: OfficeoftheSecretaryoftheCommonwealth
USDOL: UnitedStatesDepartmentofLabor
Definitions of Abbreviations
Table of ContentsSection1:ExecutiveSummary Page1
Section2:RecoveredFunds Page4
Section3:NoteworthyAccomplishments Page6
Section4:ResultsofReferralsandCooperativeOversight Page12
Section5:2014GoalsandNewInitiatives Page16
AppendixA:ExecutiveOrder499 Page19
AppendixB:MemberAgencies Page22
AppendixC:MassachusettsandUnitedStatesDepartmentofLabor
CommonInterestAgreement Page27
Table of Contents
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
For further information please contact:Heather Rowe, Director, Joint Task ForceTelephone:617-626-6973Email:[email protected]
Melissa Butts,ProgramCoordinator,JointTaskForceTelephone:617-626-7103Email:[email protected]
Media contact: Ann Dufresne,DirectorofCommunications,EOLWDTelephone:617-626-7121Email:[email protected]
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Executive SummaryInMarchof2008,GovernorDevalPatricksignedExecutiveOrder#499whichcreatedtheJointEnforcementTaskForceontheUndergroundEconomyandEmployeeMisclassification(JTForTaskForce),inordertocoordinatetheCommonwealth’seffortstoeliminateemployerfraudandemployeemisclassification.TheExecutiveOrdercallsfortheTaskForcememberagenciestoaddresstheundergroundeconomycooperativelybasedonthefollowingobjectives:
•educatebusinessownersandemployeesaboutapplicablerequirements;
•conductjoint,targetedinvestigations,andenforcementactions;
•protectthehealth,safety,wage,andbenefitrightsofworkers;
•restorecompetitiveequalityforlaw-abidingbusinesses;and
•preservetaxpayerdollarsandinsureproperpaymentoftaxes.
The Issue in MassachusettsThe“undergroundeconomy”isatermthatreferstothoseindividualsandbusinessesthatutilizeschemestoconcealormisrepresenttheiremployeepopulationtoavoidoneormoreoftheiremployerresponsibilitiesrelatedtobusinesslawsandregulatoryrequirements.Theundergroundeconomyencompassesotheractivitiessuchastaxevasion,payrollfraud,“under-the-table”work,andwagetheft.Theseactivitiesmayincludebutarenotlimitedto:payingwagesincash,skimmingsomeorallofthecashtakings,notpayingovertime,payingsub-minimumwages,chargingindividualsfortransportationorsuppliesessentialtothework,under-reportingemployees,misclassifyingemployeesasindependentcontractors,forcingemployeestosetupshellsubcontractorentities,runningaportionofnormalbusinessactivities“off-the-books,”andnotregisteringabusinesstoavoidtaxobligationsortoavoidobtainingthenecessarylicensesandinsurancepolicies.Someunscrupulousemployersmethodicallyoperatethiswayaspartoftheirbusinessmodel;otheremployersmaybeunawareoflegalrequirementsprescribedbyemploymentlawsorfeelthefinancialpressureorincentivetocutcornersintheirbusinessoperations.Forthoseemployerswhoknowinglybreakthelaws,thelureofgreaterprofits,lowercosts,andlessresponsibilityforworkersoftendrivestheirdecision-making.
Impact to Law-Abiding Businesses: Byreducingtheamountofmoneyexpendedinahostofcategorieslikewages,insurance,payrolltaxes,licenses,employeebenefits,materialsandtransportation,safetyequipment,andsafetyconditions,theseemployerscangainacompetitiveadvantageovercompaniesthatcomplywithbusinessandtaxlawsandregulations.Thisresultsinunfaircompetitioninthemarketplacebecauselaw-abidingbusinessesmustpaygreaterdirectcoststostayinbusinessandsubsidizepublicbenefitslikehealthcare,unemploymentcompensation,andworkers’compensationforthosecompaniesandindividualswhodonotplaybytherules.
Impact to Workers:Individualswhoperformworkforbusinessesthatdonotcomplywiththeselawsareoftenandsignificantlynegativelyaffected.Theseworkersareoftenpaidsub-minimumwage,receivenoovertime,andmayfacebarrierstoreceivingworkers’compensationandhealthcarecoverage,orbeentirelyineligibleforunemploymentinsurance(UI)orsocialsecuritybenefits.Theirworkingconditionsmaynotmeetsafety
Section 1: Executive SummaryPage 1
Page 2Section 1: Executive Summary
requirements,oftenputtingthemindanger.Theirvalueisdiminishedandtheirabilitytoeconomicallysustainthemselvesandtheirfamiliesisputinperil.Asaresult,otheremployersandtaxpayersarerequiredtoindirectlysubsidizetheseliabilities,intheformofworkers’compensationorUIcoveragethroughemployerfundedtrustfunds,healthcarethroughMassHealth,andotherstateandfederalsubsidies.
Impact to the Commonwealth: TheundergroundeconomyalsocompromisesthelegitimatebusinesscommunityandtheMassachusettseconomy.Legitimatebusinessesareeconomicallydisadvantagedwhencompetingwithothercompanieswhoareabletochargelessfortheirgoodsorservicesbecausetheyarenotlawabiding.Further,legitimatebusinessessubsidizethoseentitiesthatdonotfollowthelabor,licensing,andtaxlaws,astheirtaxdollarsunderwritethesystemsthatprovidebenefitstoeligibleworkerswhenthereisnoemployerofrecordtocharge.Taxpayersarealsoundulyburdenedasmanyworkerswhoaremisclassified,paidbelowminimumwage,orarewithoutemployer-providedbenefitsoftenutilizeexistingsocialsafetynets.Finally,thesheernumberofworkerswhonowfallintotheundergroundeconomyputsstressonthesocialsafetynetandtheunderlyingsocietalnormsthatweshare.
Massachusettscommunitiesarealsoadverselyimpactedbytheundergroundeconomy.Consumersdrivethedemandforlabor,goods,andservices,andmayunwittinglybecontributingtotheundergroundeconomythroughtheirbuyingchoices.Withoutrealizingit,consumersmaybepurchasinggoodsorcontractingforserviceswithentitiesthatarepartoftheundergroundeconomy.Inordertoincreaseawarenessandtolimittheavailabilityofgoodsandservicesproducedwithoutregardtothewageandhourlawsand/oraspartoftheundergroundeconomy,theUnitedStatesDepartmentofLabor(USDOL)hasbeguntorestricttheabilityofbusinessestosellthesegoodsthroughinterstatecommerce,throughwhatisknownasthe“HotGoods”provisionundertheFairLaborStandardsAct(FLSA).MassachusettshasbeensupportiveoftheUSDOL’seffortsandwasamajorpartnerintheirsuccessfuleffortstoaddressthisissueintheCommonwealth.Arecentcaseinvolvedacoordinatedresponseamonglocal,state,andfederalagenciesallutilizingtheirrespectiveauthoritytoaddressamulti-facetedexploitationofworkers.DOL’sconsentjudgmentagainstthebusinesswasenteredonApril3,2013,andprovidedforatotalof$305,500inbackwagesandliquidateddamagestofourteenaffectedemployees,aswellasacivilpenaltyof$10,267totheemployer.ThejudgmentalsoincludesapermanentinjunctionprohibitingfutureviolationsoftheFLSA’sminimumwage,overtime,recordkeeping,andhotgoodsprovisions.
Collectively,thecostsoftheundergroundeconomyarehigh.Operatingoutsidethelawallowsbusinessestohaveanunfairadvantagebyillegitimatelyloweringcosts,thereforeundercuttingtheircompetitors.Thistakesbusinessawayfromlaw-abidingcompaniesandtheiremployeeswhoaretryingtomakeanhonestliving.Thisrace-to-the-bottomhurtstheeconomy,legitimatebusinesses,andresultsintheerosionofthesocialfabric,economicstability,wagelevelsandworkingconditionsintheCommonwealth.
JTF ResultsDuringthisreportingperiod,calendaryear2013,asaresultofreferralsandcooperativeoversight,partneragenciesrecovered$15,658,226inwagerestitution,statetaxes,unemploymenttaxes,fines,andpenalties.1
Unlessotherwisenoted,allreferencestofundsrecoveredrepresentrecoveriesthroughthecooperativeefforts
1 PriorJTFreportsrepresentedactivitiesasfollows:
2009AnnualReport:March2008-March2009
2010AnnualReport:April2009-March2010
2011AnnualReport:April2010-March2011andApril2011-June2011
2012AnnualReport:July2011-December2011andJanuary2012-December2012
Beginningwiththe2013AnnualReport,activitieswillbereportedonacalendaryearcycle
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Section 1: Executive Summary
oftheJTFandrepresentmoniesaboveandbeyondwhatthememberagenciescollectedthroughtheirordinaryenforcementefforts.
Incalendaryear2013,theJTFreceived176complaintsthroughtheJTFreferralphonelineandonlinereferralservice,alongwithhundredsofcomplaintsmadedirectlytopartneragencies.TheworkoftheJTFagenciesresultedinover18,500compliancechecksandinvestigationsinthe12monthperiod.
2013 Accomplishments During2013,theJTFhadseveralnoteworthyaccomplishments:
•Expandedpartnershipswithstate,federal,andnon-governmentalstakeholdergroups;
•Invokedthe“HotGoods”provisionthroughalocal,state,andfederalinvestigationofanexploitativeagriculturalemployer;
•Exposedmisclassification,non-paymentofprevailingwages,andworkplaceviolationsonpublicconstructionjobsresultinginnumerousfines;
•ExceededDUA’scalendaryear2012recoveries;
•ParticipatedinawarenesseffortsregardinglabortraffickinginMassachusetts;
•Issuedmorethan60enforcementactionsbytheDepartmentofIndustrialAccidents(DIA)andtheDivisionofProfessionalLicensure(DPL)asaresultofaJTFoperationfocusedonthemassage/bodyworkindustry;
•PromotedtheworkoftheJTFbyparticipatinginover15presentationsandsharingofideaswithnationalandin-statestakeholders;
•AddressedcomplaintsaboutunlicensedpracticeperpetuatedbystaffingagenciesoperatingoutsidethelawthroughacoordinatedeffortbetweenDLSandDPL;
•Reapedover$10millionofrecoveredfundsfromapplicantsseekingliquorlicensesthroughlicensingcompliancechecksbetweenABCCandDUA;
•Institutedcross-agencytrainingforpartnerinvestigativeagenciesforthepurposeofincreasingefficiencyandpromotingbestpractices;and
•PromotedemployercompliancethroughJTF-sponsoredoutreachactivities.
2014 Goals and InitiativesDuring2014,theJTFlooksforwardtocontinuedsuccessbyfocusingonthefollowinggoals:
•ImplementingobjectivestoachievetheStrategicGoalssetbyEOLWDtomeetGovernorPatrick’sinitiativeforamoretransparentgovernmentundertheMassResultsplan;
•Releasingtheresultsoftheresearchstudyonemployeemisclassificationandtheundergroundeconomy inMassachusetts;
•Creatingeducationandoutreachmaterialforbusinessesandworkers;
•Continuingandexpandingcross-agencytrainingopportunities;
•ExpandingJTFpartnershipsoutsidetheExecutiveBranchAgencies;and
•Enhancingmulti-stateandfederalcooperationchannelstomaximizefutureengagements.
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Section 2: Recovered Funds
Recovered FundsRevenue Generated Through the JTF 2013
Period 5 total recoveries: $15,658,226To-Date Recoveries: $55,911,384 Forfurtherdetailsofeachpartneragencies’participation,pleaseseethe“PartnerAgencyEnforcementActivity”sectiononpages9–11.
Progression of recoveries for the JTF
Period 1 Period 2 Period 3 Period 4 Period 5
$1.4m
$15.6 million
$11 million
$6.5m
Section 2: Recovered FundsPage 4
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
$21million
$15million
$5.9m
Period 5 January 2013 - December 2013
Period 5 total recoveries
$15,658,226
DIA:$1,333,337
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page 5Section 2: Recovered Funds
Period 5 Period 4 Period 3 Period 2 Period 1
January 2013 - December 2013
January 2012 - December 2012
July 2011 - 12/1/2011
April 2010 - June 2011
April 2009 - March 2010
March 2008 - March 2009
DUA UI Contribution:
$12,935,304 $12,712,702 $4,287,848 $2,365,237 $2,071,211 $737,439
DUA FSC1: $236,738 $276,439 $16,830 Number not Reported $188,788 $239,742
DOR: $728,697 $327,869 $835,178 $3,665,097 $1,568,166 $233,468
AGO: $405,000 $593,398 $272,567 $3,033,148 $788,690 $200,425
DIA2: 1,333,337 $1,433,371 $537,450 $2,167,311 $1,872,694 $24,750
IFB3: $100,000
DLS $3,650
DPL $15,500
Sub Total: $15,443,779 $5,949,873
Total: $15,658,226 $21,393,652 $10,930,933 $6,489,549 $1,439,024
1DUAFairShareContribution(FSC)Program,partofthestatehealthinsurancelegislation(Chapter58oftheActsof2006)enactedinAprilof2006,containsobligationsforMassachusetts’employerswhoemployeleven(11)ormorefull-timeequivalent(FTE)employees.EmployersmeetingthisminimumemploymentthresholdmustfileanFSCreport.Employerswitheleven(11)ormoreFTEemployeeswhodonotmakea“fairandreasonablecontribution”totheiremployees’healthinsurance,asdefinedinDivisionofHealthCareFinanceandPolicy(DHCFP)(nowCenterforHealthInformationandAnalysis)regulation(114.5CMR16.00),arerequiredtopayaper-employeeFSCtotheCommonwealthCareFund,payabletotheDepartmentofUnemploymentAssistance(DUA).Recoverieslistedarepaymentsmadeondelinquentaccountspriortothedissolution.ThisProgramwasrepealedinJulyof2013.
2DIAhasacomplementaryenforcementoperation,andcertainDIArecoveredfundsreportedinYears2,3,4,and5cameasaresultofthatoperation.TheDIAOfficeofInvestigations,whichworkswiththeJTFinvestigativeteam,isresponsibleforensuringthatallemployersoperatingintheCommonwealthcarryworkers’compensationinsuranceatalltimes,pursuanttoM.G.L.c.152,§25Aand§25C.AnyemployerthatisfoundtobeinviolationofthestatuteisservedwithaStopWorkOrder(SWO).TheSWOrequiresthebusinesstocloseimmediatelyuponserviceoftheSWOandcarriesafineof$100perdayuntiltheemployerpresentsproofofavalidpolicyandpaysthefine.TheemployermayalsoappealtheSWO,whichcarriesafineof$250adayandtheopportunitytocontinuebusinessactivitiesuntilthehearing.TheDIAhasassignedinvestigatorstocovercitiesandtownsintheCommonwealth.Theseinvestigatorsexaminebusinessesandorganizationsofeverysizeandindustrytoensurecompliancewiththelaw.
3IFBopened10workerscompensationpremiumavoidancecasesin2013asaresultofJTFreferralsandhasadditionalongoingcasesfrompreviousyears.Becauseofthenatureofthecasesandthelengthoftimeittakestoprosecutetherearenoreportablerecoveriesin2013.
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page 6Section 3: Noteworthy Accomplishments
Noteworthy Accomplishments2013 Accomplishments JTF Expands Partnerships with State, Federal, and Stakeholder Groups In2013TheJTFdevelopednewrelationshipswithfouradditionalstateagencies,afederalagency,andanadditionalnon-governmentalstakeholdergroup.
State Agencies:
•SecretaryoftheCommonwealth’sOffice,CorporationsDivision(SOC)
•OperationalServicesDivision(OSD)
•MassachusettsOfficeofBusinessDevelopment(MOBD)
•DepartmentofPublicHealth(DPH)
Federal Agency:
•NationalLaborRelationsBoard(NLRB)
Stakeholder Group:
•CommunityLaborUnited(CLU)
AspartoftheexpansionoftheJTFpartnergroups,theJTFexpandeditscompliancecheckprocesstoinclude:
•WellnessTaxCreditProgramwithintheDepartmentofPublicHealth;
•DIASafetyGrants;
•CommonwealthCorporation’sWorkforceCompetitivenessTrustFundGrants;
•DepartmentofCareerServicesandCommonwealthCorporations’WorkforceTrainingFundsGrants;and
•MassachusettsOfficeofBusinessDevelopment’sEconomicDevelopmentIncentiveProgram.
BringingadditionalpartnersintotheJTFcouldmeanadditionalrevenuerecoverytotheCommonwealthandmoreillegalbusinesspracticesbeingthwarted.Additionalpartnersmaybehelpfultoenforcement,asitisnotuncommonforanunscrupulousbusinesstohavemultiplecomplianceissueswithmultiplegovernmentagencies.Themoreavenuesofcommunicationandcoordinationavailable,themorelikelywemaybetocurbillegalactivity.
Local, State, and Federal Investigation of Exploitative Agricultural Employer— Successful Use of the “Hot Goods” ProvisionInthesummerof2011whentheinvestigationbegan,theDepartmentofCareerServices(DCS),underEOLWD,investigatedacomplaintregardinganinjuredworkeratafarminWesternMassachusetts.DCS’sinvestigationledtotheinvolvementoftheMassachusettsDepartmentofPublicHealth,localhealthofficials,andtheUSDOLbringingactionsagainsttheemployer,ChangandSonsEnterprise,Inc.,whooperatestwofarmsinWhatelyandSouthDeerfield.Stateandlocalhealthdepartmentscondemnedandclosedtwofarmlaborcamps,where22workersandtheirfamilieswereliving,forfailuretomeetminimumsafetyandhealthstandardsandhousingcoderegulations.Inaddition,fiveotherfarmlaborcampsownedandoperatedbytheemployerwereinspected,
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
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citationswereissued,andimmediatecorrectiveactionwasattained.AsaresultofanearlierreferralfromDCS,theUSDOLhadpreviouslycitedthesameemployerforviolatingthelaborlawsundertheFairLaborStandardsAct(FLSA),specifically,forfailuretopaythefederalminimumwage.
TheUSDOLhascreditedDCS’sinvolvementinthiscase–especiallybecauseofitsassistanceinfosteringthetrustandcooperationoftheaffectedworkers–asamajorcontributortoitsabilitytoobtainaveryfavorableresolutionfortheworkers.AftertheUSDOLlearnedoftheviolations,itwaspreparedtoseekaninjunctionagainsttheemployertorestraintheshipmentofitsvegetablestorestaurantandretailestablishmentsthroughoutNewEngland,NewYork,andNewJersey,underthe“hotgoods”provisionontheFLSA.Thatprovisionprohibitstheshipment,offerforshipment,orsaleininterstatecommerce,ofanygoodsproducedinviolationoftheminimumwage,overtimepay,childlabororspecialminimumwageprovisions.Apreliminaryinjunctionwasnotrequired,however,becausethefarmimmediatelycameintocompliancewiththelawwhentheDOLmadeitsdemand.
Thiscaseinvolvedacoordinatedresponseamonglocal,state,andfederalagenciesallutilizingtheirrespectiveauthoritytoaddressamulti-facetedexploitationofworkers.DOL’sconsentjudgmentwasenteredonApril3,2013,andprovidedforatotalof$305,500inbackwagesandliquidateddamagestofourteenaffectedemployees,aswellasacivilpenaltyof$10,267totheemployer.ThejudgmentalsoincludesapermanentinjunctionprohibitingfutureviolationsoftheFLSA’sminimumwage,overtime,recordkeeping,andhotgoodsprovisions.
Misclassification, Non-Payment of Prevailing Wages, and Workplace Violations Revealed on Public Jobs TheMassachusettsprevailingwageandrecord-keepinglawsapplytoallconstructionworkperformedonpublicworksprojectsinMassachusetts.Theprevailingwagelawsallowallcontractorsbiddingonpublicworksprojectstoenjoya“levelplayingfield”bystandardizingtherateofpaytheworkerswillearn.Therecord-keepinglawallowsstateagenciestomonitorthespendingoftaxpayermoniesonpublicconstructionprojects.Acompany’sfailuretopayitsemployeesthestateprevailingwageforworkperformedatapublicconstructionsiteortoabidebytherecordkeepingrequirementscanresultinbothcivilandcriminalpenaltiesagainstthecompanyanditsowners.
TheAGO-FLDinitiatedaninvestigationonS.O.M.ConstructionEnterprises,Inc.,ofDudley,Massachusetts,anditsPresident,WesleyMroczkaafterreceivingareferralfromtheJTFandalocaltradeunionthatS.O.M.wasviolatingtheprevailingwagelaws.TheinvestigationrevealedthatS.O.M.,whichworkedon21publicworksprojectsduringtheperiodofJune2009throughMarch2013,failedtopaysomeofitsworkerstheproperprevailingwagerate,failedtosubmittrueandaccuratecertifiedpayrollrecordstotheawardingauthoritiesforthevariousconstructionprojects,failedtokeeptrueandaccuratepayrollrecordsandfailedtofurnishitsemployeeswithasuitablepaystub.Theinvestigationfurtherrevealedthecompanymisclassified18ofitsworkersasindependentcontractorsandpaidtheworkerswithcompanychecks.
S.O.M.andMroczka,werecitedforviolatingthestateprevailingwagelawandtheobligationtomaintainpayrollrecordswithregardtopublicworksprojectsthroughoutMassachusetts.Tosettletheallegationsthecompanyagreedtopayover$78,000infinesandrestitution.S.O.M.cooperatedfullywiththeAttorneyGeneral’sinvestigationbyagreeingtopay$15,000inrestitutionto10employeesandpayacivilpenaltyof$63,200totheCommonwealth.
Inaddition,asaresultofthistip,DLSinvestigatedanasbestosworksiteatasoutheasternMassachusettshighschoolinwhichsubparworkpracticesandworkplaceviolationswereidentified.DLSissued$1,200infinestoS.O.M.Construction.
Section 3: Noteworthy Accomplishments
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page 8Section 3: Noteworthy Accomplishments
Prevailing Wage Investigation Unveils Misclassification and Sub-Rate Pay over 18 Public Construction ProjectsM.D.M.Engineering,Inc.,ofDudley,Massachusetts,anditsPresident,ZbigniewMroczka,agreedtopay$35,520.16inrestitutionandpenaltiestosettleallegationstheyviolatedthestate’sprevailingwagelaws.
InOctober2011,theAGO-FLDinitiatedaninvestigationafterreceivingcomplaintsthroughtheJTFallegingthatM.D.M.Engineering,Inc.wasviolatingtheprevailingwagelaws.Theinvestigationrevealedthatwhileperformingworkon18publicconstructionprojects,M.D.M.misclassifiedsomeofitsroofingemployeesaslaborersandconsequentlyfailedtopaytheseemployeestheproperprevailingwagerate.TheinvestigationfurtherrevealedthatM.D.M.failedtosubmittrueandaccuratecertifiedpayrollrecordstotheawardingauthorities,misclassifiedtwoemployeesasindependentcontractors,failedtofurnishsuitablepaystubstoitsemployeesand,onvariousoccasions,failedtomaketimelypaymentofwages.M.D.M.fullycooperatedwiththeAttorneyGeneral’sinvestigationandagreedtopay$20,520.16inrestitutionto11employeesandpayacivilpenaltyof$15,000totheCommonwealth.
DUA Calendar Year 2013 Recoveries Exceeded Calendar Year 2012 ResultsTherevenueauditteamatDUA,workinginconjunctionwiththeAlcoholBeveragesControlCommission(ABCC),DivisionofCapitalAssetManagementandMaintenance(DCAMM),DepartmentofCareerServices(DCS),DIAandDepartmentofLaborStandards(DLS)throughaJTFeffort,recovered$13,172,042fromemployersinunpaidunemploymentandfairsharecontributionsincalendaryear2013.AspartoftheirroleswiththeJTF,investigatorsandstaffamongthesefiveagenciesconductedalmost19,000cross-agencycompliancechecks.Asaresultofthesechecks,anumberofbusinesseswerefoundtobeinviolationofstatelawandwererequiredtopayunemploymenttaxesowedinordertobeconsideredforastatelicenseorcertification.ThefollowingisadescriptionofDUA’s2013recoveriesforpreviouslyunpaidUITrustFundcontributionsworkingwitheachoftheagencieslistedbelow:
•ABCCcompliancechecksrecovered$10,697,731
•DCAMMcompliancechecksrecovered$1,007,377
•EOLWDcompliancechecksrecovered$365,560
•DCScompliancechecksrecovered$326,499
•DLScompliancechecksrecovered$129,789
JTF Taking a Lead Role in Raising Awareness of Labor Trafficking in MassachusettsOnNovember21,2011,GovernorPatricksigned“AnActRelativetotheCommercialExploitationofPeople,”intolaw.ThelawwentintoeffectFebruary19,2012.
Aspartofthisanti-humantraffickinglaw,theLegislaturecreatedaninteragencytaskforcetoaddressallaspectsofhumantraffickingthroughpolicychanges.ThetaskforceischargedwithaddressingHumanTraffickingthroughservicedevelopment,demandreduction,systemchange,publicawareness,andtraining.ThetaskforceischairedbytheAttorneyGeneralandincludesindividualsrepresentingvictimservices,academia,lawenforcement,publicpolicy,andstategovernment.
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
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In2013,JTFDirectorandDirectoroftheDepartmentofLaborStandards,HeatherRowe,wasappointedChairoftheLaborTraffickingImplementationCommittee,anadvisorygrouptotheAttorneyGeneral,tofurtheridentifyissuesspecificallyrelatingtotheforcedlaboraspectofhumantraffickingintheCommonwealth.TheLaborTraffickingImplementationCommitteeisacollaborationamongindividualsrepresentingpublicandprivateentities.Thegroupisworkingtoproducerecommendationsthataddresslabortraffickingspecificallyintermsof:
•Determiningwhatlegislative,regulatory,orpolicychangesmaybenecessary;
•Identifyingnecessaryvictimservices;
•Specifyingadditionaltrainingneedsforfirstresponders,lawenforcement,andothers;and
•Specifyingpublicawarenesscampaignsthatshouldbeundertakenandbywhom.
TheLaborTraffickingImplementationCommitteewillhave18monthsfromJanuary2014,todraftrecommendationsfortheAttorneyGeneralwhomaychoosetoissueanaddendumtotheAugust2013reportoftheFindingsandRecommendationsoftheMassachusettsInteragencyHumanTraffickingPolicyTaskForce.
Joint Task Force Operation: Bodywork Industry and Resulting Enforcement JointTaskForceinvestigatorsfromtheDepartmentofIndustrialAccidents(DIA)andtheDivisionofProfessionalLicensure(DPL)initiatedjointoperationsfocusingonthemassage/bodyworkindustry.Thisindustrywasselectedbecauseoftheparticularrisksandvulnerabilitiestohumantraffickingpresentwiththistypeofwork.Mostoftheseoperationswereconductedinconjunctionwithlocallawenforcementfromnumerouscitiesandtowns.
Theoperationsprovedsuccessfulinidentifyingnoncomplianceandegregiousbusinesspracticesamongparticularbusinesses.Sixty(60)employerswereissuedStopWorkOrdersbyDIAinvestigators,ten(10)businesseswereclosed,andfour(4)businesseswerereferredtotheDIA’sCivilLitigationUnitforfailuretoresolvetheirfines.Moreover,DIAcollected$28,400infinesandapproximately100employeeswerenewly-coveredbyworkers’compensationpolicies.Additionalcivilactionsandcriminalpenaltiesarecurrentlybeingpursued.
InvestigatorsfromtheDivisionofProfessionalLicensure,inconjunctionwithDIA,inspectedapproximately 20massageestablishmentsintheGreaterBostonareainthemonthsofFebruaryandMarch.Asaresult,over 40individualswerecheckedforprofessionallicensesand$15,500infineswereissuedfortheunlicensedpracticeofmassageorfailuretolicenseamassageestablishment.
Theinitiativeisongoing,andhasresultedinthreeseparatehumantrackinginvestigationsinpartnershipwiththeAttorneyGeneral’sOffice,theUnitedStatesDiplomaticSecurityService,andseverallocalpolicedepartments.
JTF on the Map—Presentations and Sharing of Ideas with Stakeholders TheworkoftheJTFhasnotgoneunnoticed.In2013,theJTFwasaskedtospeakaboutbestpracticesatanumberofeventsbothin-stateandnationally.Belowisalistofsomeofthe2013JTFpresentations:
•01/08/13–MassachusettsBarAssociationandLaborandEmploymentSectionCouncilRoundtable,Boston,MA
•03/13/13–NationalConsumersLeagueSenateStaffBriefing,Washington,DC–TheJTFDirectorspokeataSenatestaffbriefingtoexaminethestateofpayrollfraudintheUnitedStatesasaguestoftheNationalConsumersLeague
Section 3: Noteworthy Accomplishments
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
•04/23/13–BostonBarAssociation–DiscussionofemployeemisclassificationandtheeffectsontheCommonwealth, Boston, MA
•04/24/13–Localaccesscabletelevisionshowfeaturingadiscussionabouttheundergroundeconomy,Billerica, MA
•07/15/13–NHJointTaskForceontheMisclassificationofNHWorkers–bestpractices,Concord,NH
•07/30/13–NationalAssociationofGovernmentLaborOfficials(NAGLO)Conference,Boston,MA
•09/05/13–WBURradioprogram,thecostsoftheundergroundeconomy,Boston,MA
•09/27/13–InterstateLaborStandardsAssociation(ILSA)AnnualConference,SaltLakeCity,UT
•10/17/13–TennesseeEmploymentRelationsResearchassociation(TERRA)2013Conference–presentationonwhatMassachusettsisdoingtocombatemployerfraud,ArnoldAirForceBase,TN
•10/15/13–Multi-AgencyInvestigatorsMeeting,Boston,MA
•10/10/13–MassachusettsAFL-CIOAnnualMeeting,Plymouth,MA
Response to Complaints about Unlicensed Practice Perpetuated by Staffing Agencies Operating Outside the Law AsaresultofseveralcomplaintstotheJTFaboutunlicensedpracticewithinboththeelectricalandplumbingindustries,DLSissuedtwoseparateadvisoriestostaffingagenciesregardingtheplacementofplumbersandelectricianswithvariousworksiteemployers.CounselfortheDPL,underwhoseagencytheElectricalandPlumbingBoardsreside,reviewedandapprovedofthetwocommunications.Theactofsendinglicensedplumbersandelectricianstoperformplumbingandelectricalworkonjobsitesconstitutesengaginginthebusinessofamasterplumberormasterelectrician.Performingsuchactswithoutavalidlicenseisaviolationofstatelaw,andDLSadvisedstaffingagencieswhatcertificationstheywouldneedinordertolawfullyplacetheselicensedtradespersons.Additionally,staffingagencieswereremindedaboutlawsrelatedtothedispatchingofapprenticesandthatpromisingapprenticesOntheJobTraining(OJT)hoursforplacementinvariousjobswasnotonlymisleadingtoapprenticesbutaviolationofstatelawinmostcases.HavingaddressedthesespecificissueswheretheJTFreceivedcomplaintsaboutunlicensedandmisleadingpracticesbyemployers,DLSalsotooktheopportunitytoremindstaffingagenciesabouttheirobligationsunderthestate’sTemporaryWorkersRighttoKnowLaw,whichbecameeffectiveonJanuary31,2013.
ABCC Licensing Compliance Checks Reap over $10M in Recovered Funds from Applicants Seeking Liquor LicensesThestate’sunemploymentinsurancedepartmentrecovered$10,697,731duringcalendaryear2013througheffortsbytheABCCtoholdinitialandrenewalapplicationsforliquorlicenses,untilapplicantspaidoutstandingunemploymenttaxesduetotheCommonwealth.Throughthisinteragencycollaboration,ABCChastrulyleveledtheplayingfieldforbusinesseswithliquorlicenses,ensuringthesebusinessespaytheirfairshareanddonotgainacompetitiveadvantagebyillegallyreducingtheirexpenses.
Section 3: Noteworthy Accomplishments
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Cross-Agency TrainingTheTaskForcepartneragenciesremaincommittedtocrossagencyeducationandtrainingtoensurethatourinvestigativeagenciesarefamiliarwitheachother’sprocessesandenforcementauthority.In2013,DORcontinuedtoofferitsemployeetraininganddevelopmentprogramstotheJointTaskForceinvestigativeteamwhentrainingslotswereavailable.ThisverysuccessfulpartnershipallowedJTFpartnerstotakecoursesthatmaynothaveotherwisebeenavailabletothem.
InOctober,theJTFheldanall-agencyinvestigatormeetingwhereover45investigatorsfromJTFpartneragenciescametogethertodiscussbestpracticesandsuccessfulinitiativesamongstateagencies.Thismeetinggeneratedthoughtfuldiscussionandawarenessofotheragencies’authorityandobjectives.Asaresultofthismeeting,alistofbasicinvestigatorquestionswascompiledthroughfeedbackfromthedifferentpartneragenciesthatattendedthemeeting.Thisinformationwassubsequentlysharedwithalltheinvestigativestaff.Thehelpfulquestionslistmakesiteasiertoidentifywhatinformationpartneragenciesmayneedforeffectiveandqualityreferrals.
InDecember,ScottBurson,DeputyRegionalAttorneyfortheNationalLaborRelationsBoard(NLRB),Region1,spoketotheJTFinvestigativeteamregardingtheagency’sauthorityandobjectives,aswellashowtheJTFcanworkwiththeNLRBinthefuture.NLRBisworkingtowardincreasingvisibilitytoagenciesparticipatingintheJTFandtobetterunderstandthemissionsofJTFparticipatingagencies.Thisrelationshipwillmutuallyenhanceourabilitytoachieveourrespectivemissions,protectworkerrights,andsupportlaw-abidingemployers.Federalandstatepartnershipsareessentialinenforcinglaborlawsefficientlyandeffectively.
Cross-trainingandawarenessinitiativesassistJTFagenciesinoperatinginanefficientandcoordinatedmannerbyprovidingopportunitiesforagenciestoidentifypotentialcooperativemethods.Cross-agencytraininghelpstoincreaseinvestigators’awarenessoftherequirementsplacedonemployersbytheirsisteragenciesandencourageinter-agencyreferrals.
Promoting Employer Compliance through Outreach ActivitiesIn2013theJTFincreasededucationandoutreacheffortswithafewnewinitiatives.Earlyin2013,theJTFassistedpartneragenciesincreatingoutreachmaterialsthataredistributedbyDORtonewly-establishedbusinessesintheCommonwealth.Theseoutreachmaterials,distributedbyoutreachworkersfromDOR,explainworkers’compensationandunemploymentinsurancecontributionrequirementsunderMassachusettsGeneralLawandwerecombinedwithothermaterialsfromDORwelcomingnewbusinessestoMassachusettsandeducatingthemonbasicemployerresponsibilities.
Inaddition,Massachusettsishosttoavarietyofspecialevents,carnivals,fairsandfestivalsthatoccurthroughouttheyearalloverthestate.Thesecherishedeventsboostthelocaleconomy,provideagreatoutletforlocalvendorsandmerchants,andofferdelightfulrecreationalopportunitiesforresidentsofeveryagegroup.AfterareferraltotheJTFregardingallegationsofwageviolationsbyanout-of-stateemployeratoneofthefestivals,theJTFtookaproactiveapproachtofutureseasonalvenuestopromotecompliancewithapplicableemploymentandtaxlaws.ComplianceassistancematerialsspecificallydesignedfortemporarybusinessoperationswerecreatedanddistributedinordertoprovideaquickreferenceforfestivalvendorsaboutimportantemployerresponsibilitiesrequiredunderMassachusettsLaw.ThisproactiveoutreachisdesignedtowelcomeseasonalbusinessopportunitiestoourCommonwealthwhichdonotundercutlaw-abidingbusinessesthatmaybemorefamiliarwithourstate’slabor,licensing,andtaxlaws.ItalsoputsbusinessesonnoticethatMassachusettsisseriousaboutcombatingemployerfraud.
Section 3: Noteworthy Accomplishments
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Results of Referrals and Cooperative OversightReporting Suspected Cases of Fraud and Misclassification to the Task ForceThewebsiteoftheJointEnforcementTaskForceontheUndergroundEconomyandEmployeeMisclassification,www.mass.gov/lwd/jtf,providesinformationabouttheundergroundeconomyandhowtotakeactionwhenitcomestogettinghelpwithsuspectedcasesofworkplacefraudandemployeemisclassification.ThewebsiteprovidesthepublicwithaformthatcanbecompletedandsubmittedtotheJTFforsuspectedcasesoffraudandmisclassification.TheJTFanonymousreferraltelephoneline,1-877-96-LABOR,providesanotheravenueforindividualstoprovideinformationontheundergroundeconomytoJTFpartneragencies.
TheexistenceoftheJTFmakesreportingsuspectbusinesspracticeseasierforthepublic.Toreportemployerfraud,anindividualmayhavepreviouslyneededtocallupto10differenttiplines.WiththeJTF,anindividualcanreportanemployerpayingwagesincash,safetyconcerns,wageandhourviolations,insurancepremiumavoidance,andnon-licensure,allinoneplace.Theinformationisthendispatchedtotheagencythathandlesthenon-complianceallegationforfurtherinvestigation.
JTF Compliance ChecksJTFpartneragencies’collaborationgoesbeyondthecoordinationofJTFreferralsandinvestigations.TheJTFhasalsofacilitatedtheimplementationofnumerouscooperativeoversightprocesses,resultinginover18,500compliancechecksamongstagenciesin2013,toassistinenforcementagainstemployersviolatingMassachusettstax,employment,andlicensinglaws.AcompliancecheckoccurswhenasingleJTFpartneragencyreviewinganemployer’sconductforpurposesofanongoinginvestigation,licenseapplication,licenserenewal,procurementcertification,credential,grant,orotherbenefit,inquiresastowhetherotherJTFpartneragencieshavenoncompliancemattersrelativetothatparticularemployer.CooperativeoversightintheformofJTFcompliancecheckshasproventobeanimportanttoolformanyoftheCommonwealth’sagencies.
Section 4: Results of Referrals and Cooperative Oversight
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
DUA Recoveries – Agency Compliance Checks January 2013 – December 2013
Agency sending Compliance Check: Amount Assessed Number of Compliance Checks Completed
ABCC $4,315,322 3,318
ABCC(Renewals) $6,382,409 10,426
COMM. CORP $408,348 1,038
DCAMM $1,007,377 1,315
DCS $326,499 613
DLS $365,560 1,494
EOLWD - JTF $365,317 500
DUA-Section30(trainingopportunitiesprogram)
$0 105
FSC $236,738
Total Amount Assessed for Period 5: $13,172,042
Total number of Compliance Checks Completed for Period 5:
18,809
JTF Referral InvestigationsJTFpartneragenciesthathaveenforcementauthorityoverundergroundeconomymattershavetrackedtheiractivitieswithregardtoJTFreferralsandresultinginvestigations.During2013,JTFreviewedreferralsandopenedagencyinvestigationswhenappropriate.Theseinvestigations,conductedontopoftheagencies’independentinvestigatoryandenforcementwork,rangedfromsingle-agencyauditstomulti-agencyactions,withresultsrangingfromstopworkordersissued,toowedmoniesrecovered,toprosecutionofpersonsforegregiousinfractions,tonoviolationsfound.Itshouldbenotedthatsincewhitecollarcrimeinvestigationscanrequiremonthsofinvestigationand/orlitigation,theresultsofmanyinvestigationsmaynotbeavailableuntillongafterreferralsaremade.Thosecomplaintsthatwerenotinvestigatedeitherlackedsufficientinformationforfollow-uporlackedrelevancetothemissionoftheJTF.
Inadditiontothemonetaryrecoveries,theJTFhasopenedthedoorsforagencycollaborationthat,inmanyways,isunprecedented.Thishasallowedagenciestohavequalitytipsprovided,shareresources,andreduceduplicativeefforts.Whileeachparticipatingagencyhastheabilitytorecouprevenueonitsown,ourcollectiveeffortsprovidegreaterenforcementandcompliance;yieldssignificantlymoreinrevenuefortheCommonwealth;anddeliversbetteroutcomesforbothemployeesandemployersinthestate.TheJTFcontinuestosuccessfullyworktogethertoconfrontfraudandabuseamongemployers,toprovideanequalplayingfieldforbusinessestocompete,andtoprotect workers.
Section 4: Results of Referrals and Cooperative Oversight
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Section 4: Results of Referrals and Cooperative Oversight
Partner Agency Enforcement ActivityAlcoholic Beverages Control Commission (ABCC),whichinvestigatesapplicationsforliquorlicenses,prosecutesviolationsofpertinentstatutesandregulations,andadjudicatesdisputesamongmembersoftheindustry,participatedintherecoveryofover$10millionforthestate’sUITrustFund,andassistedJTFagenciesinreviewinginvestigationsrelativetoemployersmaintainingorapplyingforaliquorlicenseintheCommonwealth.
Attorney General’s Office - Fair Labor Division (AGO-FLD)reviewedallrelevantJTFcomplaintsforpotentialviolationsofminimumwageandchildlaborlaws;nonpaymentofwages,prevailingwageviolations;misclassificationofemployees;overtimepayviolations;payrollrecordkeeping;workers’compensation,andunemploymentinsurancefraud.TheAGO-FLDundertooknumerousinvestigationsthatoriginatedfromJTFreferralsandemployeemisclassificationcomplaints,yieldingbothcivilandcriminalenforcementactions.Includedamongsttheseefforts,theAGO-FLDissued32civilcitationswithrestitutionandpenaltyorderstotalingnearly$250,000.Additionally,theAGO-FLDsuccessfullyobtainedaguiltyfindingstemmingfroma52-countcriminalindictmentagainstafraudulentnon-profitcharitythatbeganwithemployeecomplaintsregardingmisclassification,overtimeandrelatedwageviolations,andledtothediscoveryofembezzlementandgrossfraud,amongotherthings.Together,finesandrestitutionforallchargestotaledover$155,000andtheownerwassentencedto4-5yearsinprison.
Department of Industrial Accidents (DIA)reviewedallrelevantcomplaintsreceivedbytheJTFandcheckedeachreferredemployerforworkers’compensationinsurancecoverage.BaseduponthereviewandinvestigationofallJTFreferralsincalendaryear2013,DIAissued103StopWorkOrdersforlackofworkers’compensationcoverage.Asaresult,288workerswerenewlycoveredbyworkers’compensationpoliciesandDIAreceived$52,300infines.InitscomplementaryenforcementactionsbyDIAinvestigatorsduringcalendaryear2013,DIAconducted82,964compliancechecks,5,694investigations,andissued2,541StopWorkOrdersforlackofworkers’compensationinsurance,whichresultedin$1,333,337infinesand6,288workersbroughtunderinsurancecoverage.Hadanyofthoseuncoveredworkerssustainedanaccidentonthejob,theywouldhaveturnedtothestate’sworkers’compensationinsurancetrustfundtocovertheirweeklybenefitsandmedicalexpenses;thisrepresentsanunfairdynamicforbusinessesthataredutifullypayingtheirinsurancepremiumstooperateincompliancewiththestate’sworkers’compensationlaws.
Department of Labor Standards (DLS)assistedDUAinrecoveringjustunder$365,560inunpaidunemploymentinsuranceobligationsthroughajointoperationduring2013.DLSalsoinvestigatedcomplaintsreferredbytheJTFallegingmisconductonthepartofemploymentortemporarystaffingagencies,temporaryworkersrighttoknowlawviolations,asbestosandleadpaintrelatedlicensing,andapprenticetrainingprograms.TheDLSinvestigated17employmentandplacementagenciesasaresultofJTFreferrals.Ofthe17,sixwerenotincompliancewiththestate’sEmploymentAgenciesLaw.Asaresult,$1,250infineswereassessedandwrittenwarningsweresenttothenoncompliantentities.DLSalsoinvestigatedsevenrenovation/paintingcontractorsasaresultofJTFreferralsin2013.Oneofthosefirmswasnotincompliancewiththestate’sDeleadingandLead-SafeRenovationregulation.ThecompanywascitedforaLead-SafeRenovationviolationandassesseda$1,200civilpenalty.DLSprovidedguidancetootherJTFagenciesincasesinvolvingemployersineachoftheseareas.Finally,DLScitedanasbestoscontractorthatwaspartofaJTFinvestigationfrom2012becauseofasbestosviolations.Acivilpenaltywasassessedintheamountof$1,200.Thecompanydidnotpaythecivilpenalty,acessationorderwasissued,andthecompanywasreferredtoadebtcollectionagency.
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Section 4: Results of Referrals and Cooperative Oversight
Department of Revenue (DOR)reviewedandclosed101casesthatwerereferredfromtheJTFthatresultedintheassessment$728,697ofadditionaltax,interest,andpenaltiesin2013.TherearealsoeightJTFcasestotaling$50,742thatshouldbeassessedwithinthefirstquarterof2014and23morecasesstillinprogressattheendofthecalendaryear.SincetheinceptionoftheJTF,DORhasclosed630casesfromJTFreferrals,totaling$7,185,707inrecoveries.
Department of Unemployment Assistance (DUA)reviewedallrelevantJTFreferralslookingforUnemploymentInsurance(UI)TrustFundandFairShareContribution(FSC)violationssuchasfailuretofile,underreporting,failuretoregister,and/orfailuretopayinfull.DUArecovered$13,172,042inunpaidemployercontributionstotheUnemploymentInsuranceTrustFundandFSCthroughreferralsandcompliancecross-checkswiththeAlcoholicBeveragesControlCommission(ABCC),CommonwealthCorporation(COMM.CORP),DepartmentofLaborStandards(DLS),DivisionofCapitalAssetManagementandMaintenance(DCAMM),DepartmentofIndustrialAccidents(DIA),andExecutiveOfficeofLaborandWorkforceDevelopment(EOLWD).
Division of Capital Asset Management and Maintenance (DCAMM),in2013,assistedtheCommonwealthinrecovering$1,010,225andbringing158contractorsintocompliancewithoutstandingDUAliabilities.ThiswasaccomplishedbysendingnoticestoapplicantsthattheymustsettletheirDUAobligationbeforetheycanbeeligibleforDCAMMcertificationtobidonChapter149publicbuildingconstructioncontracts.DCAMMhaltsthecertificationprocessforanycontractorsthathavenotbroughtthemselvesintocompliancewithDUAobligationsanddeniestheseapplicationsfromcertification.Theincreasein2013inthenumberofcontractorsbroughtintoDUAcomplianceinpartreflectsDCAMM’sattentiontoassuringthatnon-MassachusettscontractorsfulfilltheirlegalobligationofregisteringwithDUA.
During2013,DCAMMdeniedcertificationtothreeapplicantsforvariousreasons,includingexcessiveprevailingwageviolations,poorperformanceandsupervision,non-compliance,andmistreatmentofsubcontractors.Additionally,infewerthan10cases,applicationfileswereclosedandcertificationwithheld,oftendueto non-complianceissues.ThisrecordofachievementfortheselownumbersisattributabletoDCAMM’sinsistence,asaconditiontocertification,thatapplicantsstrictlycomplywithinternalcertificationrequirements,andtointeragencyenforcementwithDUAandotherJTF-participatingagencies.DCAMM’spracticeofrequiringthatapplicationsforrenewalofcertificationbesubmittedatleastthreemonthspriortoexpirationoftheapplicant’scurrentcertificatealsoprovidesampletimeforassuringsuchcomplianceand/orcorrectionofnon-compliance.
DCAMM’sCertificationUnitcontinuestocross-checktheDIA’sdebarmentlist,theSupplierDiversityOffice’s(SDO)DecertificationandWithdrawalListing,DUA’slistingofcontractorswithoutstandingunemploymentassistanceliabilities,theOccupationalSafetyandHealthAdministration(OSHA)website,theWorker’sCompensationRatingInsuranceBureau(WCRIB)website,theAttorneyGeneral’slistofdebarredcontractors,theSecretaryoftheCommonwealth,CorporationDivisionwebsite,theDepartmentofPublicSafetyLicenseverificationwebsite,andtheDivisionofProfessionalLicensureaspartofDCAMM’sstandardcertificationapplicationprocess.Additionally,eachcontractor’sapplicationischeckedagainstDCAMM’sinternalJTFcasetrackingdatabase,andonaweeklybasis,alistofallcontractorapplicantsreceivedissenttoallJTFpartneragenciestoinquirewhetheranyotheragencyisworkingonanymattersrelatingtotheapplicant.
Division of Professional Licensure (DPL)investigatedallJTFreferralsinvolvingunlicensedindividualsorbusinessesperformingservicesthatrequireprofessionallicensurebytheCommonwealth.Inaddition,DPLcontinuedtooperateitsHealthCareFraudTipLine,providingconsumerswithaconfidentialoutlettoalerttheagency’sHealthCareFraudUnitofexcessiveorfalsebillingpracticesbyDPLlicensedhealthprofessionals.InvestigatorsfromtheDPL,inconjunctionwithDIA,inspectedapproximatelytwenty(20)massageestablishmentsintheGreaterBostonareainthemonthsofFebruaryandMarch.Asaresult,overforty(40)individualswerecheckedforprofessionallicensesand$15,500infineswereissuedfortheunlicensedpracticeofmassageorfailuretolicenseamassageestablishment.
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Section 5: 2014 Goals and Initiatives
2014 Goals and InitiativesNowinitssixthyear,theJTFremainsfocusedonincreasingthevolumeandimpactofcross-agencyenforcement.Thiswillbeaccomplishedbybuildingontheexistingprocessesbywhichpartneragenciesconductcooperativeinvestigations.Theseeffortsraiseawarenessinthegeneralpublic,thebusinesscommunity,andwithingovernment,abouttheworkoftheJTFagenciestocombattheundergroundeconomyandtheresponsibilitiesofemployersintheCommonwealth.ThereareanumberofkeyinitiativesbeingundertakenbytheJTFinfurtheranceofthesegoals.
Strategic GoalsInaccordancewithExecutiveOrder540,“Improving the performance of state government by implementing a comprehensive strategic planning and performance management framework in the Executive departments,”theJTFsetoutits2013–2015strategicgoalstotheGovernor:
•Increasingeducation,coordinationandenforcementofthestate’slabor,licensing,andtaxlawsthroughtheworkoftheUndergroundEconomyTaskForce;
•Increasingrevenuerecoverythroughenforcementbyinspection,audit,andinformation-sharing;
•LevelingtheplayingfieldforemployersbypublicizingJTFenforcementsuccessesthatwillserveasadeterrenttocuttingcornersonlabor,licensing,andtaxlaws;and
•EstimatingthefrequencyofemployeemisclassificationandundergroundeconomicactivityamongtheCommonwealth’sindustriesthroughtheundertakingofaresearchstudy.
MassResults StrategicPlan2013-2015
TheMassResultsprogrambringstogetherkeyinitiativesfocusedonmakingstategovernmentmoreeffective,moreaccountableandmoreopen–deliveringbetterresultsforthepublic.
InvestinginEducationtoClosethe Achievement
Gap
Governor’s Goals:
EOLWD’s Goals:
Joint Task Force’s Goals:
InvestinginInnovationandInfrastructuretoCreateJobs,Expand
Opportunity
ExpandingAccesstoAffordable,Quality
Health Care
BuildingStronger,SaferCommunities
throughPositiveYouthDevelopmentandYouthViolencePrevention
Protect Worker Safety,Health,Wagesand
WorkingConditions
Shrink UndergroundEconomy
Increaseeducation,coordinationandenforcementofthestate’slabor,licensing,andtaxlawsthroughtheworkofthe
UndergroundEconomyTaskForce
EstimatethefrequencyofemployeemisclassificationandundergroundeconomicactivityamongtheCommonwealth’s
industriesthroughtheundertakingofaresearchstudy
Increaserevenuerecoverythroughenforcementbyinspection,audit,andinformation-sharing
LeveltheplayingfieldforemployersbypublicizingTaskForceenforcementsuccessesthatwillserveasadeterrenttocuttingcornersonlabor,licensing,andtaxlaws
BetterLaborMarket Data
PublicSectorLaborStability
MaximizeJobPlacementand
Hiring
FinancialReliefFollowingJobLoss
IncreaseYouthEmployment
Align Skill Sets ofUnemployedwithEmployer
Demand
CompensationforWorkplaceInjury
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Section 5: 2014 Goals and Initiatives
Research Study on Employee Misclassification and the Underground Economy in MassachusettsAresearchstudytodetermineandanalyzethecurrentstateoftheundergroundeconomyinMassachusettswasunderwayduring2013,throughapartnershipamongDOR,DUA,andtheJTF.TheJTFhopesthattheresultsofthestudywillinformfuturepolicyconsiderationsbaseduponwhatthestudyrevealsaboutissues,statistics,lostrevenues,andotherimpactsonbusinessesandindividualworkers.Theneedforconcretedatathatclarifiesandillustratesthisproblemiscriticalformakinginformedpolicydecisions.Thestudy’spurposewastoestimatethefrequency,scale,andconsequencesofmisclassificationandtheundergroundeconomyontheCommonwealth.RevenueSolutions,Inc.(RSI)wasselectedbyDORasapartneroftheJTF,toundertaketheanalysisandwriteareportoftheirfindings.TheRSIreportprovidesadetaileddescriptionofthespecificaimsandanalysesitundertook.TheJTFalsocreatedaTechnicalAdvisoryBoard(TAB)toworkwiththeRSIteamduringitsanalysis.Becauseoftheconfidentialityofthedata,theTABcouldnot,anddidnot,participateinthecreationofthedatasetortheanalysisofthedata.Itdidprovide,throughaseriesofmeetingswiththeJTFandRSIthroughoutthestudyperiod,responsesandsuggestionsregardingtheanalysis.TheTABwasalsochargedwithwritinganindependentassessmentofthestudyfindingsbasedonRSI’sfinalreporttotheJTF.Thestudyresultswillbereleasedin2014.
Education and OutreachTheJTFwillcontinueaneducationandoutreachplanthatinvolvesthefollowingmulti-facetedapproach:
1)Createeducationalmaterialforworkersandemployerstobringawarenesstotheongoingissuesoftheundergroundeconomy.Workercardswillhavebriefdescriptionsofsignsofundergroundeconomyactivityandhowtoreportit.Businessoutreachwillincludeabrochurefocusedoneducatingbusinessownersoftheadverseeffectsofcontributingtotheundergroundeconomyormisclassifyingemployees.Thematerialwillalsohavecontactinformationtoreportfraudulentworkpractices.
2)UtilizeitsstatewideAdvisoryCounciltoassistineducatingworkersandbusinesses,identifypotentialproblemareas,anddeveloppolicyrecommendationsaroundspecificlegislativeproposals.
3)ContinuetoenhanceitswebpagewiththegoalofimprovingaccesstoinformationabouttheundergroundeconomyandtheworkoftheJointTaskForce.
4)AcceptinvitationsfromstakeholderstoshareinformationabouttheJTF,discussbestpractices,opportunities,andchallengesfacedbyemployers,employees,regulators,andadvocates.
Cross-Agency TrainingTheJTFpartneragenciesremaincommittedtoacross-agencyeducationandtrainingplantoensurethatourinvestigativeagenciesarefamiliarwithvariousprocessesandenforcementauthority.Cross-trainingensuresefficiency,coordinationandencouragesinteragencyreferrals.During2014,theJTFwillmaketrainingopportunitiesavailableforpartneragencyinvestigators.
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page 18Section 5: 2014 Goals and Initiatives
Expanding Additional Partnerships TheJTFhasseentremendoussuccessasaresultofcompliancechecksamongourpartneragencies.Monetaryrecoverieshaveincreaseddramaticallyasaresultofcross-agencycommunicationtoincreasecompliancewithmultiplestateagencies’requirements.ThiscoordinatedreviewhelpstoleveltheplayingfieldforbusinessesastheyarebeingrequiredtopayalloutstandingUITrustFundcontributionsandhaveavalidworkers’compensationpolicy(ifoneisrequired)beforebeinggrantedauthorizationtolawfullyconductaregulatedactivity.Ifabusinesschoosesnottobecomecompliant,itcouldpotentiallylosealicenseorforgoopportunitiestobidonastate-fundedproject.BringingadditionalpartnersintotheJTFcouldmeanadditionalrevenuerecoverytotheCommonwealthandmorebusinessescomingoutoftheshadows.Moreover,additionalpartnersmaybehelpfultoenforcement,asitisnotuncommonforanunscrupulousbusinesstohavemultiplecomplianceissueswithmultiplegovernmentagencies.Themoreavenuesofenforcementavailable,themorelikelywemaybetocurbillegalbehaviors.
Multi-State and Federal CooperationManyJTFagenciesandpartners,suchasDUA,DIA,DLS,DOR,AGO-FLD,andtheIFBhavestrong,workingrelationshipswithfederalauthorities.TheJTFisfocusedonbuildingontheseexistingchannelsofcooperationandmaximizinganypotentialassistancethatcanbeprovidedinaddressingtheundergroundeconomyinMassachusetts.Also,theJTFhasdevelopedrelationshipswithitscounterpartsinotherstatestosharenewideasinvolvingmethodsofcross-agencyenforcement,andtoopenpotentialavenuesformulti-stateenforcementinitiatives.
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page19Appendix A: Executive Order 499
Appendix A: Executive Order 499By His ExcellencyDEVAL L. PATRICK
GOVERNOREXECUTIVE ORDER NO. 499
Establishing a Joint Enforcement Task Force on the Underground Economy and Employee Misclassification
WHEREAS,thehealthoftheCommonwealth’seconomy,itsworkers,anditsbusinessesisharmedbytheexistenceofanillegalundergroundeconomyinwhichindividualsandbusinessesconcealtheiractivitiesfromgovernmentlicensing,regulatory,andtaxingauthorities;
WHEREAS,individualsandbusinessesthatoperateintheundergroundeconomydosoinviolationoflabor,employment,tax,insuranceandoccupationalsafetylaws,byfailingtopayrequiredwages,carryworkers’compensationinsurance,complywithhealth,safetyandlicensingrequirements,orpayincometaxesandpayrolltaxesthatfundunemploymentinsurance,disabilityinsurance,andMedicareandSocialSecuritybenefits;
WHEREAS,certainbusinessesalsoimproperlyclassifytheiremployeesas“independentcontractors”(referredtoas“employeemisclassification”)andhireundocumentedworkerstoavoidcompliancewithlabor,employment,tax,insuranceandregulatoryrequirements;
WHEREAS,theundergroundeconomyand,inparticular,thepracticeofemployeemisclassification:(1)exploitsvulnerableworkersanddeprivesthemoflegalbenefitsandprotections;(2)givesunlawfulbusinessesanunfaircompetitiveadvantageoverlawfulbusinessesbyillegallydrivingdownviolators’taxes,wages,andotheroverheadcosts;(3)defraudsthegovernmentofsubstantialtaxrevenues;and(4)harmsconsumerswhosufferatthehandsofunlicensedbusinessesthatfailtomaintainminimumlevelsofskillsandknowledge;
WHEREAS,arecentstudybasedonauditsofMassachusettsunemploymentrecordsforconstructionemployersbetween2002and2005foundthatupto14%oftheemployeescoveredbytheauditswereestimatedtohavebeenmisclassifiedbyemployers;
WHEREAS,effortstocombattheundergroundeconomyandemployeemisclassificationhistoricallyhavebeendividedamongvariousagencies,diminishingthetimeliness,efficiencyandeffectivenessofsuchefforts;and
WHEREAS,thecreationofjointtaskforceshasproventobeaneffectivemechanismforenhancinginteragencycooperation,informationsharing,andtheprosecutionofviolators;
NOW,THEREFORE,I,DevalL.Patrick,GovernoroftheCommonwealthofMassachusetts,byvirtueoftheauthorityvestedinmebytheConstitution,Part2,c.2,§I,Art.I,doherebyorderasfollows:
Section1.ThereisherebyestablishedtheJointEnforcementTaskForceontheUndergroundEconomyandEmployeeMisclassification(the“TaskForce”).
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Appendix A: Executive Order 499
Section2.TheTaskForceshallconsistofthefollowingmembersortheirdesignees:theDirectorofLabor,theCommissionerofRevenue,theCommissioneroftheDepartmentofIndustrialAccidents,theChiefoftheAttorneyGeneral’sFairLaborDivision,theCommissioneroftheDivisionofOccupationalSafety,theCommissioneroftheDepartmentofPublicSafety,theDirectoroftheDivisionofProfessionalLicensure,theDirectorofApprenticeshipTrainingandtheDirectoroftheDivisionofUnemploymentAssistance.TheDirectorofLaborshallchairtheTaskForce.
Section3.TheTaskForceshallcoordinatejointeffortstocombattheundergroundeconomyandemployeemisclassification,includingeffortsto:(a)fostercompliancewiththelawbyeducatingbusinessownersandemployeesaboutapplicablerequirements;(b)conductjoint,targetedinvestigationsandenforcementactionsagainstviolators;(c)protectthehealth,safetyandbenefitrightsofworkers;and(d)restorecompetitiveequalityforlaw-abidingbusinesses.
Infulfillingitsmission,theTaskForceshall:
a.FacilitatetimelyinformationsharingbetweenandamongTaskForcemembers,includingthroughtheestablishmentofprotocolsbywhichparticipatingagencieswilladviseorrefertootheragenciesmattersofpotentialinvestigativeinterest;
b.IdentifythoseindustriesandsectorswheretheundergroundeconomyandemployeemisclassificationaremostprevalentandtargetTaskForcemembers’investigativeandenforcementresourcesagainstthosesectors,includingthroughtheformationofjointinvestigativeandenforcementteams;
c.Assessexistinginvestigativeandenforcementmethods,bothinMassachusettsandinotherjurisdictions,anddevelopandrecommendstrategiestoimprovethosemethods;
d.Encouragebusinessesandindividualstoidentifyviolatorsbysolicitinginformationfromthepublic,facilitatingthefilingofcomplaints,andenhancingtheavailablemechanismsbywhichworkerscanreportsuspectedviolations;
e.Solicitthecooperationandparticipationofdistrictattorneysandotherrelevantenforcementagencies,includingtheInsuranceFraudBureau,andestablishproceduresforreferringcasestoprosecutingauthoritiesasappropriate;
f.Workcooperativelywithemployers,labor,andcommunitygroupstodiminishthesizeoftheundergroundeconomyandreducethenumberofemployeemisclassificationsby,amongothermeans,disseminatingeducationalmaterialsregardingtheapplicablelaws,includingthelegaldistinctionsbetweenindependentcontractorsandemployees,andincreasingpublicawarenessoftheharmcausedbytheundergroundeconomyandemployeemisclassification;
g.Workcooperativelywithfederal,commonwealth,andlocalsocialservicesagenciestoprovideassistancetovulnerablepopulationsthathavebeenexploitedbytheundergroundeconomyandemployeemisclassification,includingbutnotlimitedtoimmigrantworkers;
h.Identifypotentialregulatoryorstatutorychangesthatwouldstrengthenenforcementefforts,includinganychangesneededtoresolveexistinglegalambiguitiesorinconsistencies,aswellaspotentiallegalproceduresforfacilitatingindividualenforcementefforts;and
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Appendix A: Executive Order 499
i.Consultwithrepresentativesofbusinessandorganizedlabor,membersoftheGeneralCourt,communitygroupsandotheragenciesconcerningtheactivitiesoftheTaskForceanditsmembersandwaysofimprovingitseffectiveness,includingconsiderationofwhethertoestablishanadvisorypanelunderthesecretaryoflaborandworkforcedevelopment.
Section4.TheTaskForceshalltransmitanannualreporttotheGovernorsummarizingtheTaskForce’sactivitiesduringtheprecedingyear.Thereportshall,withoutlimitation:(a)describetheTaskForce’seffortsandaccomplishmentsduringtheyear;(b)identifyanyadministrativeorlegalbarriersimpedingthemoreeffectiveoperationoftheTaskForce,includinganybarrierstoinformationsharingorjointaction;(c)propose,afterconsultationwithrepresentativesofbusinessandorganizedlabor,membersofthelegislatureandotheragencies,appropriateadministrative,legislative,orregulatorychangestostrengthentheTaskForce’soperationsandenforcementeffortsandreduceoreliminateanybarrierstothoseefforts;and(d)identifysuccessfulpreventativemechanismsforreducingtheextentoftheundergroundeconomyandemployeemisclassification,therebyreducingtheneedforgreaterenforcement.TheTaskForcealsoshalltakeappropriatestepstopublicizeitsactivities.
Section5.Totheextentpermittedbylaw,everyagencywithintheExecutiveBranchshallmakeallreasonableeffortstocooperatewiththeTaskForceandtofurnishsuchinformationandassistanceastheTaskForcereasonablydeemsnecessarytoaccomplishitspurposes.
Section6.NothinginthisExecutiveOrdershallbeconstruedtorequireactioninconsistentwithanyapplicablestateorfederallaw.
Section7.ThisExecutiveOrdershallcontinueineffectuntilamended,superseded,orrevokedbysubsequentExecutiveOrder.
GivenattheExecutiveChamberinBostonthis12thdayofMarchintheyearofourLordtwothousandandeightandoftheIndependenceoftheUnitedStates,twohundredandthirty-two.
DEVALL.PATRICKGOVERNORCommonwealthofMassachusetts
WILLIAM FRANCIS GALVINSecretaryoftheCommonwealth
GOD SAVE THE COMMONWEALTH OF MASSACHUSETTS
Page 22Appendix B: Member Agencies
Appendix B: Member AgenciesExecutive Office of Labor and Workforce DevelopmentDepartment of Industrial Accidents (DIA)
TheDepartmentofIndustrialAccidentsadministersthelawrelatedtotheMassachusettsworkers’compensationsystem.Thislawbalancestheprovisionofpromptandfaircompensationtoworkerswithoccupationalinjuriesandillnessarisingoutofandinthecourseofemployment,withtheneedsofemployerstomanageworkers’compensationinsurancecosts.TheDepartmentalsoadministerstheWorkers’CompensationTrustFund,whichprovidesbenefitstoinjuredworkerswhentheiremployerfailstoproperlyinsureorprovidethesebenefits.DIA’sinvestigativeunitworkstoensurethatbusinessesandindustriesareincompliancewiththeworkers’compensationstatute.OneenforcementtoolemployedbytheDIAistheissuanceofimmediateStopWorkOrderstoviolators,whoaresubjecttofinesandprosecutionforfailingtoprovidetheiremployeeswithworkers’compensationbenefits.
For more information, visit: www.mass.gov/dia
Department of Labor Standards (DLS)
TheDepartmentofLaborStandards(DLS)isresponsibleforthepromotionandprotectionofworkers’safetyandhealth,wagesandworkingconditions,andtosupportemployersandworkersintheutilizationofapprenticeshipasaworkforcedevelopmenttool.DLSprotectsworkersbymeansofeducationandtraining,workplacesafetyandhealthconsultationandassessment,occupationalinjuryandillnessdatacollectionandanalysis,andconsistentandresponsibleadministrationofitsstatutesandregulations.DLSoperatesthefollowingprograms:DivisionofApprenticeTraining,PrevailingWageProgram,MinimumWageProgram,EmploymentAgencyProgram,On-siteConsultationProgram,AsbestosProgram,LeadProgram,OccupationalLeadPoisoningRegistry,MassachusettsWorkplaceSafetyandHealthProgram,OccupationalSafetyandHealthStatisticsProgram,andIndustrialHygieneLaboratory.
For more information, visit: www.mass.gov/dols
Department of Unemployment Assistance (DUA)
TheDepartmentofUnemploymentAssistanceadministerstheunemploymentinsuranceprograminMassachusetts,providingtemporaryfinancialassistancetoworkerswholosetheirjobsthroughnofaultoftheirown.Fundingforunemploymentinsurancebenefitscomesfromcontributionspaidbythestate’semployers;nodeductionsaremadefromworkers’salaries.EmployerspayquarterlycontributionstotheMassachusettsDUA.ProtectingtheintegrityoftheunemploymentinsuranceprogramisaresponsibilitytakenseriouslybytheDUA.WorkingwithJointTaskForcepartners,progressisbeingmadeinpreventing,detecting,investigating,andprosecutingthosewhodefraudorattempttodefraudtheunemploymentinsurancesystem.Thisincludesemployersthatevadepayingtheirfairshareofunemploymentinsurancecostsbyintentionallymisclassifyingtheiremployeesasindependentcontractors.
For more information, visit: www.mass.gov/dua
Office of the Attorney GeneralFair Labor Division
TheOfficeofAttorneyGeneral’sFairLaborDivisionenforcesvariouslawsthatprotectworkers,includingtheprevailingwage,minimumwage,paymentofwages,overtime,payrollrecordkeeping,employeemisclassification,tippooling,childlabor,Sundayandholidaypremiumpaylaws.TheFairLaborDivisionalsoinvestigatesallegationsofviolationoftheState’spublicbiddinglawsinordertoprotecttheintegrityoftheprocessofawardingpublicworksconstructioncontracts.InadditiontoprosecutingemployerswhofailtofollowtheCommonwealth’swageandhourlaws,theFair
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Appendix B: Member Agencies
LaborDivisionworkstoprotectemployeesfrombeingexploitedbyanemployerbyeducatingbothemployersandemployeesaboutthelawandemployees’rights.
TheAttorneyGeneralaimstosetalevelplayingfieldforemployersandemployeesthroughouttheState.TheAttorneyGeneral’sspecificjurisdictiontoenforcetheCommonwealth’swageandhourlaws,bothcriminallyandcivilly,aswellasitsgeneraljurisdictiontoenforcecriminallaws,includinginsuranceandtaxlaws,larcenyandembezzlement,allowsittotakeaholisticapproachtoprosecutingcasesinvolvingtheundergroundeconomy.ItsbroadjurisdictionenablesittoworkinpartnershipwithfellowmemberagenciesontheJTFinordertoeffectivelyinvestigateandprosecutecases,aswarranted.
For more information, visit: www.mass.gov/ago
Executive Office of Administration and FinanceDivision of Capital Asset Management and Maintenance (DCAMM)
TheDivisionofCapitalAssetManagementandMaintenance(DCAMM)ischargedwithprovidingprofessionalandcomprehensiveservicestostateagenciesinthefieldofpublicbuildingdesign,construction,maintenance,andrealestate.DCAMM’sscopeofservicesincludesplanning,design,construction,capitalrepairsandimprovements,assetmanagement,contractorcertificationandcompliance,leasing,acquisitionanddispositionofrealestate,andmaintenance.
DCAMMservestheJTFbyidentifyingDCAMM-certifiedcontractorswhohavebecomenon-compliantwithotherstateagencies’regulationsorrequirementsinanefforttobringthecontractorsbackintocompliancewithstatelawortodecertifyordebarsuchcontractorswhenappropriate.DCAMMutilizesinformationobtainedfromvariouspartneragenciesaspartofthecertificationprocessinordertomakeafinaldeterminationonwhetherthecontractormeetsthequalificationstobecertifiedtoperformpublicwork.
For more information, visit: www.mass.gov/dcam
Department of Revenue (DOR)
ThemissionoftheMassachusettsDepartmentofRevenueistoachievemaximumcompliancewiththetax,childsupportandmunicipalfinancelawsoftheCommonwealth.TheDepartmentisdedicatedtoenforcingtheselawsinafair,impartialandconsistentmannerbyprovidingprofessionalandcourteousservicetoallitscustomers.TheDepartmentisalsocommittedtotheobjectivesoftheUndergroundEconomyTaskForcetoenforceemployeeclassificationlawsthroughincreasedpublicawarenessandenforcement.Misclassificationofemployeesbyemployershasresultedinmillionsofdollarsinlosttaxrevenue.BothwiththeTaskForceandindependently,DORwillbeassigningmoreresourcestoemployeemisclassificationandotherwithholdingaudits.
For more information, visit: www.mass.gov/dor
Supplier Diversity Office (SDO)
SDOcreatesopportunitiesforminorityandwomenownedbusinessbygrowingthenumberofstateandfederallycertifiedbusinessesandofferingbusinessinsuranceandadvocacyprograms.
For more information, visit: www.mass.gov/sdo
Executive Office of Public Safety and SecurityDepartment of Public Safety (DPS)
TheDepartmentofPublicSafetyisalicensingandregulatoryagencywhosemissionistoreducetherisktolifeandpropertybypromotingsafetyinthedesign,construction,installation,inspection,operation,repairand
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alterationofboilers,pressurevessels,elevators,andbuildings.TheDPSlicensesindividualsinmanyareas,includingelevatormechanics,constructionsupervisorlicenses,firemanandengineeringlicenses,aswellaslicensesforsprinklerfitters,pipefittersandrefrigerationtechnicians,andhoistingoperators.InordertoensurecompliancewiththelawsoftheCommonwealth,theDepartmentiscommittedtosharingitsresourcesinacooperativeeffortwithotherstateagenciestoensurethatworkersintheseindustriesarenotexploitedbybusinessownersthroughmisclassificationorothermeansofskirtinglabor,taxandoccupationalsafetylaws.
For more information, visit: www.mass.gov/eopss
Executive Office of Health and Human ServicesMassachusetts Office for Refugees and Immigrants (MORI)
ThestatutorypurposeoftheMassachusettsOfficeforRefugeesandImmigrants(MORI)istopromotethefullparticipationofrefugeesandimmigrantsasself-sufficientindividualsandfamiliesintheeconomic,socialandciviclifeoftheCommonwealth.TheprimaryresponsibilityoftheofficeistoadministerthefederallyfundedrefugeeresettlementprograminMassachusetts,whichprovidesassistancetorefugees,suchascasemanagement,employmentservices(includingEnglishlanguagetraining),transitionalcashandmedicalassistance,healthscreening,andfostercareforunaccompaniedminors.MORIalsoadministersastate-fundedcitizenship-assistanceprogramtoassistlegalpermanentresidentsinMassachusettstobecomenaturalized UnitedStatescitizens.MORIservestheTaskForceinanadvisorycapacity,attendingTaskForcemeetingsuponinvitation;andprovidinginformationonunderstandingculturalissues,identifyingimmigrantcommunitygroupstofacilitateTaskForceoutreach,aswellasidentifyingtranslationresources,uponrequest.
For more information, visit: www.mass.gov/ori
Massachusetts Department of Public Health
ThemissionoftheMassachusettsDepartmentofPublicHealthistopreventillness,injury,andprematuredeath,toassureaccesstohigh-qualitypublichealthandhealthcareservices,andtopromotewellnessandhealthequityforallpeopleintheCommonwealth.DPHenvisionsaCommonwealthinwhichallpeopleenjoyoptimalhealth.DPHprovidesprogramstoaddressspecificdiseasesandconditionsandofferservicestoaddresstheneedsofvulnerablepopulations.DPHalsodevelops,implements,promotes,andenforcespoliciestoassurethattheconditionsunderwhichpeoplelivearemostconducivetohealthandenablepeopletomakehealthychoicesforthemselvesandtheirfamilies.
For more information, visit: www.mass.gov/dph
Executive Office of Housing and Economic DevelopmentDivision of Banks (DOB)
TheDivisionofBanks(DOB)isresponsibleforensuringasound,competitive,andaccessiblebankingandfinancialservicesenvironmentintheCommonwealth.DOBiscommittedtoprovidingeffectivefinancialandconsumerprotectionsupervisionoverregulatedentitiesthroughintra-andinter-agencycoordination.Understatute,theDOBistaskedwithchartering,licensing,andexaminingStateCharteredBanks,CreditUnions,TrustCompanies,MortgageBrokers,MortgageLenders,MortgageLoanOriginators,CheckCashers,CheckSellers,DebtCollectors,ForeignTransmittalAgencies,InsurancePremiumFinanceAgencies,MotorVehicleSalesFinanceCompanies,RetailInstallmentFinanceCompanies,andSmallLoanCompanies.
For more information, visit: www.mass.gov/dob
Appendix B: Member Agencies
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Division of Professional Licensure (DPL)
TheDivisionofProfessionalLicensure,undertheOfficeofConsumerAffairsandBusinessRegulation,oversees31boardsofregistrationthatlicenseandregulatemorethan370,000licenseesinsome50tradesandprofessions.DPLalsooverseesprivateoccupationalschools.DPL’smissionistoprotectthepublichealth,safety,andwelfarebylicensingqualifiedindividualsandbusinesseswhoprovideservicestoconsumers,andbyfairenforcementofthestatutesandregulationsoftheboards.Boardscanrevokeorsuspendalicenseafterinvestigationandadjudicationofcomplaints,andDPLworkswithparticipating.JointTaskForceagenciestoprosecuteunlicensedpracticecasesonbehalfofitsboards.
For more information, visit: www.mass.gov/dpl
Office of Small Business and Entrepreneurship (OSBE)
TheOfficeofSmallBusinessandEntrepreneurship’smissionistocreatepoliciesandprogramstosupportsmallbusinessesandentrepreneursacrosstheCommonwealth.OSBEisthemostvaluableresourceforSmallBusinessCommunity,andutilizesthefollowingbusinessdevelopmenttools:SmallBusinessAssistanceAdvisoryCouncil,TechnicalAssistanceGrantsandOffice,andSmallBusinessDevelopmentCenters.OSBEisdedicatedtounderstandingsmallbusinessneeds,providingappropriateprograms,andadvocatingpolicytoenablegrowthandjobcreation.
Office of the TreasurerAlcoholic Beverages Control Commission (ABCC)
TheAlcoholicBeveragesControlCommissionregulatesthealcoholicbeveragesindustryinMassachusetts,directlylicensingthestatewideactivitiesofliquormanufacturers,transporters,wholesalers,andbrokers.TheABCCalsoregulatesinterstateandinternationalalcoholicbeveragebusinessesbyissuingcertificatesofcompliance.TheABCCinvestigatesapplicationsforlicenses,prosecutesviolationsofpertinentstatutesandregulations,andadjudicatesdisputesamongmembersoftheindustry.
For more information, visit: www.mass.gov/abcc
Office of the Secretary of the CommonwealthCorporations Division
TheCorporationsDivisionoftheSecretaryoftheCommonwealthWilliamFrancisGalvin’sOfficeistherepositoryforthepublicrecordsofapproximately200,000profitandnonprofitcorporationsandapproximately140,000limitedliabilityentitiesorganizedorregisteredtotransactbusinessintheCommonwealth.
AllcorporationsandcertainotherbusinessentitiestransactingbusinessintheCommonwealthandorganizedunderthelawsofadifferentstateorcountryarerequiredtofilearegistrationwiththeCorporationsDivision.ThoseforeigncorporationsorotherbusinessentitiestransactingbusinessintheCommonwealthwithoutfilingaregistrationwiththeCorporationsaresubjecttoseveralpenaltiespursuanttoMassachusettsGeneralLawsChapter156D,Section15.02.
In2013theCorporationsDivisionjoinedtheJTF.SincethattimetheDivisionhasassistedtheTaskForcebypursuingentitiesorganizedunderthelawsofotherstatesorcountriesthatfailtocomplywiththelawsoftheCommonwealthregardingtransactingbusinesswithinMassachusetts.
Appendix B: Member Agencies
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IndependentMassachusetts Commission Against Discrimination (MCAD)
TheMassachusettsCommissionAgainstDiscrimination(MCAD)isresponsibleforenforcementofMassachusetts’anti-discriminationlaws,includingtheFairEmployment,FairEducationandFairHousingPracticesActs,aswellastheMaternityLeaveandPublicAccommodationslaws,onbehalfofthepublic.TheLegislaturehasaffordedtheCommissionwithsignificantandcomprehensivepowerandauthoritytoinvestigate,conciliate,prosecuteandadjudicateclaimsofdiscrimination,incidenttoourprimarymandateofprotecting,preserving,andenhancingthecivilrightsofourcitizens.
For more information, visit: www.mass.gov/mcad
Federal PartnersNational Labor Relations Board (NLRB)
TheNationalLaborRelationsBoardisthefederalagencythatenforcestheNationalLaborRelationsAct,alawthatappliestomostprivatesectoremployers.Federallawprotectstherightofemployeestoengageinorrefrainfromprotected,concertedactivitieswithotheremployeesindealingwiththeiremployerswithrespecttowage,benefits,andothertermsandconditionsofemployment.TheAgencyismostcommonlyassociatedwiththeprotectionofunionactivityandenforcingtherequirementthatwhereemployeeshavechosentoberepresentedbyaunion,thatunionsandemployersengageingoodfaithcollective-bargaining,buttheprotectionofconcertedemployeeactionisnotlimitedtounionsituations.TheActgivessubstantivelegalprotectionforgroupemployeeactionseekingtoengageemployerswithrespecttotheirwages,benefits,andothertermsandconditionsofemployment;therefore,itprovidesimportantprotectionstoemployeesengagedinself-helpeffortswithrespecttotheiremployment.Throughitsintakeandpublicinformationactivities,NLRBpersonnelfrequentlyencounterindividualswhohavesubstantiverightsprotectedbyoneormorememberagenciesoftheJTF.
For more information, visit: www.nlrb.gov
Other PartnersInsurance Fraud Bureau (IFB)
TheInsuranceFraudBureauofMassachusetts(IFB)wasauthorizedbyMassachusettsstatutein1990tocriminallyinvestigatesuspectedfraudulentinsurancetransactions.TheIFBbecameoperationalin1991.ThejurisdictionoftheIFBwasexpandedeffectiveJanuary1,1992tospecificallyincludethecriminalinvestigationofworkers’compensationfraud,workers’compensationclaimfraud,andworkers’compensationpremiumevasioncasespresentedbymisclassificationofemployees—schemestoaffectexperiencemodificationorunreportedorunderreportedpayroll.Underexistinglaw,anyonewhoislicensedunderMassachusettsGeneralLaw(M.G.L.)Chapter175,exemptfromthelicensingrequirementsofM.G.L.c.175,orotherwiseengagedinthebusinessofinsurance,andwhobecomesawareofsuspectedinsurancefraud,isrequiredtoreportittotheIFB.Inadditiontoincarceration,therestitutionordersonworkers’compensationpremiumevasioncasestotalover$63million.
ReferralscanbemadethroughtheIFBwebsiteatwww.ifb.orgorviatheIFBhotline,1-800-32-FRAUD.
Formoreinformation,visit:www.ifb.org
Appendix B: Member Agencies
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
Page27Appendix C: Common Interest Agreement
Appendix C: Common Interest Agreement
COMMON INTEREST AGREEMENT BETWEEN
PARTICIPATING AGENCIES OF THE U.S. DEPARTMENT OF LABOR AND
PARTICIPATING AGENCIES OF THE COMMONWEALTH OF MASSACHUSETTS
ThisAgreementismadeandenteredintobyandbetweenparticipatingagenciesoftheUnitedStatesDepartmentofLabor,specifically,theWageandHourDivision,theEmployeeBenefitsSecurityAdministration,theOfficeofFederalContractCompliancePrograms,andtheOccupationalSafetyandHealthAdministration(allrepresentedbytheOfficeoftheSolicitorandhereinaftercollectivelyreferredtoasthe“Department”),andparticipatingagenciesoftheCommonwealthofMassachusetts,specifically,theExecutiveOfficeofLaborandWorkforceDevelopment,theOfficeoftheAttorneyGeneral,theDepartmentofRevenue,theDepartmentofUnemploymentAssistance,theDepartmentofIndustrialAccidents,theDepartmentofLaborStandards,theMassachusettsCommissionAgainstDiscrimination,theAlcoholicBeveragesControlCommission,theDivisionofBanks,theDepartmentofPublicSafety,theDivisionofCapitalAssetManagement,andtheDivisionofProfessionalLicensure(hereinaftercollectivelyreferredtoas“TheCommonwealth”).TheDepartmentandtheCommonwealtharecollectivelyreferredtoas“theparties.”
Withthespecificandmutualgoalsofprovidingclear,accurate,andeasy-to-accesscomplianceinformationtoemployers,employees,andotherstakeholders,andofsharingresourcesandenhancingenforcementby,asappropriate,conductingcoordinatedenforcementactionsandsharinginformationconsistentwithapplicablelaw,thepartiesagreetoenterintothisAgreement.
THEREFORE,ITISMUTUALLYAGREEDTHAT:
Purpose
ThepartiesrecognizethevalueofestablishingacollaborativerelationshiptopromotecompliancewithlawsofcommonconcernintheCommonwealthofMassachusetts.ThepartiesenterintothisAgreementtomoreeffectivelyandefficientlycommunicateandcooperateonareasofcommoninterest.Thisincludes,butisnotlimitedtothefollowing:sharingoftrainingmaterials;providingemployersandemployeeswithcomplianceassistanceinformation;andconductingcoordinatedlawenforcementinvestigationsandsharinginformation,whereappropriateandtotheextentallowedbylaw,toprotectthewages,retirementincomesecurity,equalemploymentopportunity,unemploymentbenefits,workers’compensationentitlements,safety,andhealthofAmerica’sworkforce,andtoensurealevelplayingfieldforlaw-abidingbusinesses,andpropercompliancewithapplicabletaxandlicensinglaws.
Agency Responsibilities
TheDepartmentisresponsibleforadministeringandenforcingawiderangeoffederallaborlaws,includingtheFairLaborStandardsAct,theFamilyandMedicalLeaveAct,theMigrantandSeasonalAgriculturalWorkerProtectionAct,workerprotectionsprovidedinseveraltemporaryvisaprograms,theprevailingwagerequirementsoftheDavis-BaconandRelatedActs,theServiceContractAct,theEmployeeRetirementIncomeSecurityAct,theOccupationalSafetyandHealthAct,numerouswhistleblowerprovisionsoffederalstatutes,ExecutiveOrder11246,Section503oftheRehabilitationActof1973,andtheVietnamEraVeterans’ReadjustmentAssistanceActof1974.NothinginthisagreementlimitstheDepartment’senforcementoftheseandotherlaws.
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Appendix C: Common Interest Agreement
TheCommonwealthisresponsiblefor:
ExecutiveOfficeofLaborandWorkforceDevelopment(EOLWD)/JointEnforcementTaskForceontheUndergroundEconomyandEmployeeMisclassification(JTF)
•EOLWDisresponsiblefordirectingandoverseeingtheworkoftheDepartmentofUnemploymentAssistance,theDepartmentofIndustrialAccidents,theDepartmentofLaborStandards,andtheDepartmentofCareerServices.TheSecretaryofLaborandWorkforceDevelopmentservesasthechairofJTFaccordingtoMassachusettsExecutiveOrder499(E.O.499).
•AccordingtoE.O.499,JTFcoordinatesjointeffortstocombattheundergroundeconomyandemployeemisclassification,includingeffortsto:(a)fostercompliancewiththelawbyeducatingbusinessownersandemployeesaboutapplicablerequirements;(b)conductjoint,targetedinvestigationsandenforcementactionsagainstviolators;(c)protectthehealth,safetyandbenefitrightsofworkers;and(d)restorecompetitiveequalityforlaw-abidingbusinesses.
•AccordingtoE.O.499,infulfillingitsmission,JTF:
oFacilitatestimelyinformationsharingbetweenandamongTaskForcemembers,includingthroughtheestablishmentofprotocolsbywhichparticipatingagencieswilladviseorrefertootheragenciesmattersofpotentialinvestigativeinterest;
oIdentifiesthoseindustriesandsectorswheretheundergroundeconomyandemployeemisclassificationaremostprevalentandtargetTaskForcemembers’investigativeandenforcementresourcesagainstthosesectors,includingthroughtheformationofjointinvestigativeandenforcementteams;
oAssessesexistinginvestigativeandenforcementmethods,bothinMassachusettsandinotherjurisdictions,anddevelopsandrecommendsstrategiestoimprovethosemethods;
oEncouragesbusinessesandindividualstoidentifyviolatorsbysolicitinginformationfromthepublic,facilitatingthefilingofcomplaints,andenhancingtheavailablemechanismsbywhichworkerscanreportsuspectedviolations;
oSolicitsthecooperationandparticipationofdistrictattorneysandotherrelevantenforcementagencies,includingtheInsuranceFraudBureau,andestablishesproceduresforreferringcasestoprosecutingauthoritiesasappropriate;
oWorkscooperativelywithemployers,labor,andcommunitygroupstodiminishthesizeoftheundergroundeconomyandreducethenumberofemployeemisclassificationsby,amongothermeans,disseminatingeducationalmaterialsregardingtheapplicablelaws,includingthelegaldistinctionsbetweenindependentcontractorsandemployees,andincreasingpublicawarenessoftheharmcausedbytheundergroundeconomyandemployeemisclassification;
oWorkscooperativelywithfederal,commonwealth,andlocalsocialservicesagenciestoprovideassistancetovulnerablepopulationsthathavebeenexploitedbytheundergroundeconomyandemployeemisclassification,includingbutnotlimitedtoimmigrantworkers;
oIdentifiespotentialregulatoryorstatutorychangesthatwouldstrengthenenforcementefforts,includinganychangesneededtoresolveexistinglegalambiguitiesorinconsistencies,aswellaspotentiallegalproceduresforfacilitatingindividualenforcementefforts;and
oConsultswithrepresentativesofbusinessandorganizedlabor,membersoftheGeneralCourt,communitygroupsandotheragenciesconcerningtheactivitiesoftheTaskForceanditsmembersandwaysofimprovingitseffectiveness,includingconsiderationofwhethertoestablishanadvisorypanelunderthesecretaryoflaborandworkforcedevelopment.
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Page 29Appendix C: Common Interest Agreement
Attorney General’s Office, Fair Labor Division (AGO-FLD)
•TheAGO-FLDenforcestheCommonwealth’swageandhourlaws,bothcriminallyandcivilly,includingtheprevailingwage,minimumwage,paymentofwages,overtime,payrollrecordkeeping,employeemisclassification,tippooling,childlabor,Sundayandholidaypremiumpaylaws.
•TheAGO-FLDalsoinvestigatesallegationsofviolationoftheState’spublicbiddinglawsinordertoprotect theintegrityoftheprocessofawardingpublicworksconstructioncontracts.
•InadditiontoprosecutingemployerswhofailtofollowtheCommonwealth’swageandhourlaws, AGO-FLDworkstoprotectemployeesfrombeingexploitedbyanemployerbyeducatingbothemployers andemployeesaboutthelawandemployees’rights.
Department of Unemployment Assistance (DUA)
•TheDUAadministerstheunemploymentinsuranceprograminMassachusetts,providingtemporaryfinancialassistancetoworkerswholosetheirjobsthroughnofaultoftheirown.Fundingforunemploymentinsurancebenefitscomesfromcontributionspaidbythestate’semployers;nodeductionsaremadefromworkers’salaries.EmployerspayquarterlycontributionstotheMassachusettsDUA.
Department of Industrial Accidents (DIA)
•PursuanttoM.G.L.Chapter152,themissionoftheDIAistoadministertheCommonwealth’sWorkers’Compensationsystemandprovidepromptandfaircompensationtovictimsofoccupationalinjuriesandillness,andtoseethatmedicaltreatmenttoinjuredworkersisprovidedinatimelymannerwhilebalancingtheneedsofemployerstocontainworkers’compensationinsurancecosts.Additionally,DIAprovidesdisputeresolutionofworkers’compensationcasesthroughdueprocessandadjudicationandadministerstheSpecial,PrivateandPublicTrustFunds.
Department of Revenue (DOR)
•ThemissionofDORistoachievemaximumcompliancewiththetax,childsupport,andmunicipalfinancelawsoftheCommonwealth.DORisdedicatedtoenforcingtheselawsinafair,impartialandconsistentmannerbyprovidingprofessionalandcourteousservicetoallitscustomers.DORisalsocommittedtotheobjectivesofJTFtoenforceemployeeclassificationlawsthroughincreasedpublicawarenessandenforcement.
Division of Banks (DOB)
•ThemissionofDOBistoensureasound,competitive,andaccessiblebankingandfinancialservicesenvironment.DOBiscommittedtoprovidingeffectivefinancialandconsumerprotectionsupervisionoverregulatedentitiesthroughintra-andinter-agencycoordination.Understatute,theDOBistaskedwithchartering,licensing,andexaminingStateCharteredBanks,CreditUnions,TrustCompanies,MortgageBrokers,MortgageLenders,MortgageLoanOriginators,CheckCashers,CheckSellers,DebtCollectors, ForeignTransmittalAgencies,InsurancePremiumFinanceAgencies,MotorVehicleSalesFinanceCompanies,RetailInstallmentFinanceCompanies,andSmallLoanCompanies.
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Page 30Appendix C: Common Interest Agreement
Department of Labor Standards (DLS)
•DLSisresponsibleforthepromotionandprotectionofworkers’safetyandhealth,wagesandworkingconditions,andtosupportemployersandworkersintheutilizationofapprenticeshipasaworkforcedevelopmenttool.DLSprotectsworkersbymeansofeducationandtraining,workplacesafetyandhealthconsultationandassessment,occupationalinjuryandillnessdatacollectionandanalysis,andconsistentandresponsibleadministrationofitsstatutesandregulations.DLSoperatesthefollowingprograms:
oDivisionofApprenticeTraining o Prevailing Wage Program oMinimumWageProgram oEmploymentAgencyProgram oOn-siteConsultationProgram oAsbestosProgram oLeadProgram oOccupationalLeadPoisoningRegistry oMassachusettsWorkplaceSafetyandHealthProgram oOccupationalSafetyandHealthStatisticsProgram oIndustrialHygieneLaboratory oMineSafetyandHealthProgram
Division of Capital Asset Management (DCAM)
•DCAMischargedwithprovidingprofessionalandcomprehensiveservicestostateagenciesinthefieldofpublic-buildingdesign,construction,maintenanceandrealestate.DCAM’sscopeofservicesincludesplanning,design,construction,capitalrepairsandimprovements,assetmanagement,contractorcertificationandcompliance,leasing,acquisitionanddisposition,andmaintenance.
Alcoholic Beverages Control Commission (ABCC)
•ABCCregulatesthealcoholicbeveragesindustryinMassachusetts,directlylicensingthestatewideactivitiesofliquormanufacturers,transporters,wholesalers,andbrokers.ABCCalsoregulatesinterstateandinternationalalcoholicbeveragebusinessesbyissuingcertificatesofcompliance.TheABCCinvestigatesapplicationsforlicenses,prosecutesviolationsofpertinentstatutesandregulationsandadjudicatesdisputesamongmembersoftheindustry.
Massachusetts Commission Against Discrimination (MCAD)
•MCADisresponsibleforenforcingMassachusetts’anti-discriminationlaws,includingtheFairEmployment,FairEducationandFairHousingPracticesActs,aswellastheMaternityLeaveandPublicAccommodationslaws,onbehalfofthepublic.
•TheLegislaturehasaffordedMCADwithsignificantandcomprehensivepowerandauthoritytoinvestigate,conciliate,prosecuteandadjudicateclaimsofdiscrimination,incidenttoourprimarymandateofprotecting,preserving,andenhancingthecivilrightsofourcitizens.
Division of Professional Licensure (DPL)
•DPL,undertheOfficeofConsumerAffairsandBusinessRegulation(OCABR),overseesthestate’s29Boards ofRegistration,andregulatesmorethan40tradesandprofessions.
•Itsmissionistoprotectthepublichealth,safety,andwelfarebylicensingqualifiedindividualswhoprovideservicestoconsumersandbyfairenforcementsofstatutesandregulationsoftheboardsofregistration. Eachboardcanrevokeorsuspendalicenseafterinvestigationofseriouscomplaints.
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Department of Public Safety (DPS)
•TheDepartmentofPublicSafetyisalicensingandregulatoryagencywhosemissionistoreducetherisktolifeandpropertybypromotingsafetyinthedesign,construction,installation,inspection,operation,repairandalterationofboilers,pressurevessels,elevators,andbuildings.TheDPSlicensesindividualsinmanyareas,includingelevatormechanics,constructionsupervisorlicenses,firemanandengineeringlicenses,aswellaslicensesforsprinklerfitters,pipefitters,refrigerationtechnicians,andhoistingoperators.
Contacts
•EachparticipatingagencywilldesignateacontactpersonresponsibleforcoordinatingactivitiescoveredunderthisAgreement.
•EachparticipatingagencywilldesignatearepresentativetomeetannuallytoreviewareasofmutualconcernandthetermsandconditionsofthisAgreement.
Enforcement
Whereappropriateandtotheextentallowableunderlaw,
•AnyoralloftheparticipatingagenciesmayconductcoordinatedinvestigationsofcommoninterestperiodicallyintheCommonwealthofMassachusetts,asmutuallyagreedupon.
•Theparticipatingagencieswillmakereasonableeffortstocoordinatetheirrespectiveenforcementactivitiesandassisteachotherwithenforcement,totheextentpracticable.
•Theparticipatingagencieswillmakereferralsofpotentialviolationsofeachother’slaws.
Effect of Agreement
•ThisAgreementdoesnotauthorizetheexpenditureorreimbursementofanyfunds.NothinginthisAgreementobligatesanyparticipatingagencytoexpendappropriations,enterintoanyothercontract,orincurotherobligations.
•ByenteringintothisAgreement,thepartiesdonotimplyanendorsementorpromotionofthepolicies,programs,orservicesoftheother.
•NothinginthisAgreementisintendedtodiminishorotherwiseaffecttheauthorityofanyparticipatingagencytoimplementitsrespectivestatutoryfunctions.
•ThisAgreementcontainsallthetermsandconditionsagreeduponbytheparties.Nootherunderstandings,oralorotherwise,regardingthesubjectmatterofthisagreementshallbedeemedtoexistorbebindingupontheparties.Thisagreementisnotintendedtoconferanyrightuponanyprivatepersonorotherthirdparty.
•NothinginthisAgreementwillbeinterpretedaslimitingorsupersedingtheparticipatingagencies’normaloperations.Thisagreementalsodoesnotlimitorrestricttheparticipatingagenciesfromparticipatinginsimilaractivitiesorarrangementswithotherentities.
•ThisagreementwillbeexecutedinfullcompliancewiththePrivacyActof1974,andanyotherapplicablefederallawsandlawsoftheCommonwealth.
Exchange of Information
•TheDepartmentandtheCommonwealthendeavortocooperatewithothergovernmentagenciestothefullestextentpossibleunderthelaw,subjecttothegenerallimitationsthatanysuchcooperationmustbeconsistentwitheachparty’sownstatutoryobligationsandenforcementefforts.Itistheparties’viewthatsharingofinformation—includingcertaindocuments,factualmaterials,mentalimpressions,memoranda,interviewreports,research,andotherinformation,someofwhichmaybeprivileged—incasesofcommoninterestistotheparties’mutualbenefit.
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•ExchangeofsuchinformationpursuanttothisAgreementisnotapublicdisclosureundertheFreedomofInformationAct,5U.S.C.552.
•InformationthatisotherwisediscoverableandnotprivilegedshallnotbecomeprivilegedsimplybecauseitwassharedbetweenanyparticipatingagencyoftheDepartmentandanyparticipatingagencyoftheCommonwealth.
•Privilegedinformationmeansinformationthatmaybeexemptfromdisclosuretothepublicorotherunauthorizedpersonsunderstateand/orfederallaws,orotherwisemayproperlybewithheldfromdisclosure.Suchinformationmayincludebutisnotlimitedto:theidentitiesofpersonswhohavegiveninformationtothepartiesinconfidenceorundercircumstancesinwhichconfidentialitycanbeimplied;anyemployeestatementsinanyoftheparticipatingagencies’enforcementfilesthatwereobtainedundertheseconditions;informationconcerninginvestigativetechniquesorproceduresthatifdisclosedcouldlesseninvestigativeeffectiveness;internalopinionsandrecommendationsoffederalorstatepersonnel,including(butnotlimitedto)investigatorsandsupervisors;informationorrecordscoveredbytheattorney-clientprivilegeand/ortheattorneywork-productprivilege;personalinformationonlivingpersons;taxandchildsupportinformation;individuallyidentifiablehealthinformation;andconfidentialbusinessinformationandtradesecrets.Anyphysicalmaterialorotherdocumentcontainingsuchinformationshouldbeclearlymarked“privileged”beforeitisprovidedpursuanttothisAgreement.
•ConfidentialUnemploymentCompensation(UC)information,asdefinedin20CFR603.2(b),meansanyunemploymentcompensationinformation,asdefinedin20CFR603.2(j),requiredtobekeptconfidentialunder20CFR603.4oritssuccessorlaworregulation.
•Acknowledgingthatprivilegesandprotections(includingwithoutlimitationtheinvestigativefilesprivilege,informant’sprivilege,attorney-clientprivilege,workproductdoctrine,deliberativeprocessprivilege,andconfidentialityagreementsororders)mayapplytocertainsharedinformation,thepartieswishtopursuetheircommonbutseparateinterestswithoutwaivinganyprivilegeorprotectionthatmayapplytothatsharedinformation.
•WhenprivilegedinformationisshareditshallbeusedandaccessedonlybyauthorizedindividualsandonlyforthelimitedpurposesofcarryingoutactivitiespursuanttothisAgreementasdescribedherein.Theinformationshallnotbeduplicatedorfurtherdisclosedwithoutthewrittenauthorizationofthepartythatprovidedit,unlesstheinformationbecomespublicwithoutviolationofthisAgreementorunlesstheinformationisrequiredtobedisclosedbyCourtorderorotherlegalauthority.ThepartiesshallinstructallsuchauthorizedindividualsabouttheconfidentialityrequirementsunderbothapplicablestateandfederallawandtheCommonInterestAgreementitself,andaboutthepotentialsanctionsforunauthorizeduse,browsing,ordisclosureofprivilegedinformation.
•Intheeventthatthereisapublicproceeding,suchasatrial,inwhichprivilegedinformationmaybeusedortestimonyofeitherparty’semployeessought,promptnoticeshallbegiventotheotherpartytoenableittotakesuchaction,ifany,thatitdeemsappropriateunderthecircumstances.
•Subjecttoapplicablerequirementsoflaw,theparticipatingagenciesshalladheretothelimitationsplacedontheminanyrequesteddisseminationofCJIS/NCICdatatonon¬criminaljusticeagencies.
•Shouldeitherpartyreceivearequestorsubpoenathatwould,fairlyconstrued,seekproductionofprivilegedinformationthatitreceivedpursuanttothisAgreement,thepartyreceivingsucharequestorsubpoenashalltakereasonablemeasures,includingbutnotlimitedtoassertingthecommoninterestprivilege,toprecludeorrestricttheproductionofsuchinformation,andshallpromptlynotifythepartyprovidingsuchinformationthatsucharequestorsubpoenahasbeenreceived,sothatthepartyprovidingsuchinformationmayfileanyappropriateobjectionsormotions,ortakeanyotherappropriatesteps,toprecludeorconditiontheproductionofsuchinformation.
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•Neitherpartyshallhaveauthoritytowaiveanyapplicableprivilegeordoctrineonbehalfoftheotherparty,norshallanywaiverofanapplicableprivilegeordoctrinebytheconductofonepartybeconstruedtoapplytotheotherparty.
•TherequirementsofthisAgreement,asappliedtoallprivilegedinformation,shallsurviveallofthefollowing:(a)withdrawalbyanyparticipatingagencypartyfromthisAgreement;(b)terminationofthisAgreement,(c)finaldispositionofclaimsoractionswhetherbyjudgment,settlementorothermeansofdisposition.
•Inadditiontotherequirementsabove,confidentialunemploymentcompensationinformationmaybeexchangedonlysubjecttotheconfidentialityrequirementsof20CFR603.4,andanyotherapplicablelaws.Inadditiontotherequirementsabove,thetypesofconfidentialinformationreferencedinAppendixAmaybeexchangedonlysubjecttothecorrespondingconfidentialityrequirementsincludedinAppendixA.
Subjecttotheforegoingconstraints:
•Theparticipatingagenciesagreetoexchangeinformationonlawsandregulationsofcommonconcerntotheotherparticipatingagencies,asrequestedandtotheextentpracticableandallowablebylawandpolicy.
•Theparticipatingagencieswillestablishamethodologyforexchanginginvestigativeleads,complaints,andreferralsofpossibleviolations,totheextentfeasibleandallowablebylawandpolicy.
•Theparticipatingagencieswillexchangeinformation(statisticaldata)onincidenceofviolationsinspecificindustriesandgeographicareas,asrequestedandtotheextentpracticableandallowablebylawandpolicy.
ResolutionofDisagreements
•DisputesarisingunderthisAgreementwillberesolvedinformallybydiscussionsbetweenparticipatingagencyPointsofContact,orotherofficialsdesignatedbyaparticipatingagency.
PeriodofAgreement
•ThisAgreementbecomeseffectiveuponthesigningbyallparticipatingagencies,andwillexpire3yearsfromtheeffectivedate.ThisAgreementmaybemodifiedinwritingbymutualconsentofallparticipatingagencies.AnyparticipatingagencymaywithdrawfromparticipationinthisAgreementbygivingthirty(30)daysadvancewrittennoticepriortothedateofintendedwithdrawal.RenewaloftheAgreementmaybeaccomplishedbywrittenagreementofallparticipatingagencies.
AppendixA(ofCommonInterestAgreement)
•InaccordancewithM.G.L.c.14,§6andDOR’sTaxConfidentialityStatutes,M.G.L.c.62C,§§21and21B:
oConfidentialtaxinformationmustbesafeguardedinaccordancewiththebestpracticescontainedintheNationalInstituteofStandardsandTechnology(NIST)SpecialPublication800-53Revision2, “SecurityControlsforFederalInformationSystems”,Annex2,“Moderate-ImpactBaseline” (NIST800-53(ModerateLevel))(thisdocumentcanbefoundat:http://csrc.nist.gov/publications/PubsSPs.html)regardingthephysicalandtechnicalsecurityoftheDORInformation.
oofthisAgreementoruntilterminationofthisAgreement.Thebestpracticescontainedinthe NIST800-88Standardregardingthedestructionofelectronicorpapermediaandmagnetictapes;applicablestateandfederalstatutesandregulations,includingG.L.c.931;andtheMassachusettsStatewideRecordsRetentionSchedulemustbefollowed.
oAnypersonhavingaccesstothetaxinformationmustbeinformedofDOR’sconfidentialityrequirementsandthesanctionsforunauthorizeddisclosureandsignDOR’sconfidentialityacknowledgement.
oAccesstoconfidentialinformationmaynotbereleasedtoanythirdpartywithoutDOR’swrittenapproval.
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oDORreservestherighttoperiodicallyreviewtheuseoftheconfidentialtaxinformation,includingon-siteauditsandinspections,toreasonablydetermineandverifythattheconfidentialityoftheDORInformationismaintainedinaccordancewiththetermsofthisAgreement,andthattheinformationisusedonlyforauthorizedpurposes.
oDORmaydiscontinueorsuspendtheprovisionofthetaxinfo’nationimmediatelyifitdeterminesthatanytermofthisAgreementhasbeenviolated.
•InaccordancewithM.G.L.c.151:
oPrivilegedunemploymenttaxinformationshallbestoredinaplacephysicallysecurefromaccessbyunauthorizedpersons.
oPrivilegedunemploymenttaxinformationmaintainedinelectronicformatmustbestoredsothatunauthorizedpersonscannotobtaintheinformationbyanymeans.
oPrivilegedunemploymenttaxinformationshallbereturnedtotheagencyprovidingtheinformationwhennolongerneededforthepurposesofthisAgreementoruponterminationofthisAgreement.
oPriortoaccessingprivilegedunemploymenttaxinformation,partiesshallagreeto:(1)instructallpersonnelhavingaccesstotheprivilegedunemploymenttaxinformationaboutconfidentialityrequirementsandthesanctionsforunauthorizeddisclosure,(2)signanacknowledgementthatallpersonnelhavingaccesstotheprivilegedunemploymenttaxinformationhavebeensoinstructed,and(3)allowwithreasonablenoticeon-siteinspectionsbythepartyprovidingtheprivilegedunemploymenttaxinformation.
•InaccordancewithM.G.L.c.93H,agenciesshallsafeguardpersonalinformationofresidentsoftheCommonwealth.
Thisagreementisexecutedasofthe19thdayofSeptember,2011.
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Joint Enforcement Task Force on the Underground Economy and Employee Misclassification Annual Report 2013
For further information please contact:Heather Rowe, Interim Director, Joint Task ForceTelephone:617-626-6973Email:[email protected]
Melissa Butts,ProgramCoordinator,JointTaskForceTelephone:617-626-7103Email:[email protected]
Media contact: Ann Dufresne,DirectorofCommunications,EOLWDTelephone:617-626-7121Email:[email protected]
COMMONWEALTH OF MASSACHUSETTSDeval L. Patrick, Governor
Rachel Kaprielian, Secretary, Executive Office of Labor and Workforce Development
Report Submitted by: Heather Rowe,
Director, Joint Task Force
1-877-96-LABOR www.mass.gov/lwd/jtf