HB 1590 Employer Misclassification of Employees as Independent Contractors

Department of Labor, Licensing and Regulation Secretary Tom Perez testified before the House Economic Matters Committee on HB 1590, March 20, 2008.

HB 1590 addresses the misclassification of employees as independent contractors, a pervasive practice that cheats the state out of revenue, creates an unlevel playing field for businesses and deprives workers of their basic rights in the workplace.

Employee misclassification is a practice often used intentionally by employers to reduce their tax burden and avoid various laws designed to create protections in the workplace. Recent DLLR audits have found that about 20 percent of Maryland employers misclassify employees as independent contractors.

Misclassification is an already prevalent issue that in recent years has emerged as a serious threat to workers, law-abiding employers and the economy in general, and it is one method employers use to operate in the underground economy. It has been estimated that an employer who misclassifies a worker as an independent contractor instead of as an employee can save up to 30 percent of the payroll costs associated with employing that person.

But misclassifying employees to save money is cheating, and those savings come at a significant cost to the rest of us. The ramifications are far-reaching. CLICK HERE FOR FULL TESTIMONY
 

DLLR Secretary Perez and Financial Regulation Commissioner Sarah Bloom Raskin reminded Marylanders to beware of high-cost anticipation loans on the federal economic stimulus payments that will be sent beginning in May to more than 130 million households nationwide. The Commissioner has issued an advisory reminding Marylanders to think twice before giving their money away.

Much like the refund anticipation loans offered by tax preparers and lenders each year during tax season, stimulus payment anticipation loans are expected to be promoted as a way to receive the tax rebate early. As part of the recently approved federal economic stimulus package, eligible persons will receive up to $600 ($1200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Anticipation loans typically impose excessive interest rates resulting in a very high cost for the loan.

The quickest way to obtain your rebate is to remember to file your 2007 tax return and opt for direct deposit to your checking account. Your stimulus rebate payment will be made by direct deposit as well. Those who receive their tax return checks by mail will also receive their rebate by mail. For more information on the stimulus payments, visit the IRS website. You can also view the Commissioner’s advisory, visit the Commissioner's advisory.
 

Legislative Breakfast

On March 4, 2008 a legislative breakfast sponsored by the Governor’s Workforce Investment Board and the Workforce Investment Network for Maryland was held at Governor Calvert House in Annapolis.

Governor Martin O’Malley addressed the crowd of about 100 invited guests which included Maryland state legislators, local elected officials, sub-cabinet members, Governor’s Workforce Investment Board members, Workforce Investment Board (WIB) members and Workforce Investment Area directors. The purpose of the legislative breakfast was to increase awareness of Maryland’s workforce development system and highlight the State’s network of 34 locally driven one-stop workforce centers, which assist more than 120,000 Marylander’s each year.

Speakers included:

Martin O'Malley Governor

Secretary Perez DLLR

Andy Moser
Asst. Secretary
Division of Workforce Development

Eric Seleznow
Executive Director Governor's Workforce Investment Board

Karen Sitnick President Workforce Investment Network for Maryland

New Appointments:

GWIB Executive Director Eric Seleznow announced two additions to his staff:

GWIB DEPUTY DIRECTOR – Lynn Reed
After an extremely competitive and lengthy search process, Lynn Reed was appointed as the Deputy Director of GWIB.  Ms. Reed is a veteran workforce development professional with over 15 years of experience at the national, state and local level.  She has public and private sector policy, management and operational experience within diverse segments of the workforce investment system.  As Senior Director, Business Partnerships for LSG, Inc., a professional services firm in Northern Virginia, Ms. Reed worked with the U.S. Department of Labor Employment and Training Administration’s Business Relations Group to launch the President’s High Growth Job Training Initiative (HGJTI).  She managed the efforts for select industries on the national level, including biotechnology, hospitality and retail. Ms. Reed has worked on numerous other national initiatives including WIA, the Older Americans Act, Job Corps, community colleges, youth programs and BRAC.  Ms. Reed is experienced at managing large national projects, grant solicitations and grant applications.  She will begin with GWIB on April 9.
 
GWIB PROGRAM MANAGER – Rachel Indek
Ms. Indek comes to GWIB from the Governor’s Office of Community Initiatives and the Governor’s Office for Children, where she held the position of Intergovernmental Affairs Director.  Ms. Indek's work included the development of communications and outreach strategies, legislative coordination and a variety of other policy and program activities.  Ms. Indek has over 7 years of professional experience in fundraising, communications, and event planning, working professionally on over 60 federal, state and local political campaigns. Ms. Indek is a graduate of Salisbury State University and is presently working on her Masters in Public Policy at the University of Baltimore.  She will begin with GWIB on April 10.
 

Secretary Tom Perez Announces new Maryland Home Improvement Commission Executive Director

Secretary Perez named Steve Smitson as the Division of Occupational and Professional Licensing's new MHIC Executive Director. Mr. Smitson comes to DLLR with a wealth of experience and will employ his bilingual law background to oversee an agency which licenses, regulates and investigates the home improvement workforce. Mr. Smitson most recently worked as an attorney for Wellens Law firm in Severna Park, Maryland providing legal representation in special education, business and family law matters. He was also an adjunct instructor at Montgomery College’s Hispanic Business and Training Institute in Gaithersburg teaching a Spanish course on home improvement law and business principles. Mr. Smitson worked as the Legal Director and Supervising Attorney for CASA of Maryland, Inc., for twelve years and was the Strategic Researcher and Organizer for the Laborers International Union of North America, based in Washington D.C. Mr. Smitson has two published reports since graduating Cum Laude from the D.C. School of Law in 1994.
 

Free Safety and Training Sessions

Eight health and safety training sessions, including two new classes were available, free of charge, to Maryland employees and employers during the month of March.

Permit Required Confined Space – March 4, 2008
Trenching & Excavation Competent Person – March 7, 2008
Introduction to Industrial Hygiene for Construction (New) – March 18, 2008
Construction Site Safety II – March 20, 2008 from
Roofing & Framing Fall Protection (New) – March 25, 2008
Bloodborne Pathogens – March 13, 2008
MSDS/RTK/PPE – Material Safety Data Sheets/Right to Know/Personal Protective Equipment - March 27, 2008

Also, Seguridad en la Construcción (Safety on the Construction Site) – March 21, 2008 was conducted entirely in Spanish.
 

Foreclosure Update:

Congressman Chris Van Hollen will hold a Mortgage Foreclosure Workshop
on Saturday, April 5, 2008 from 9:30 - 11:00 a.m. at the Sligo Middle School -
1401 Dennis Avenue - Silver Spring, Maryland 20902.

Hear from top officials what the federal and state governments are doing to help homeowners face the current housing crisis and the steps that homeowners can take to protect their homes from foreclosure.  Housing counselors will be on hand to address homeowners’ specific questions. A sign language interpreter and bilingual counselors will be available.

Secretary Tom Perez will serve as a panelist for this event.

All residents from the 8th Congressional District are invited to participate. If you have questions, please call (301) 424-3501