Frequently Asked Questions (FAQs) for Workers - Worker Classification Protection
- What is Workplace Fraud?
- What industries does the Workplace Fraud law apply to?
- How do I know if I have been properly classified in the workplace?
- The person or business for whom I work gave me a "Notice to Independent Contractors and Exempt Persons” to complete and I feel that I am an employee rather than an independent contractor or exempt person. What should I do?
Q: What is Workplace Fraud?
A: Workplace fraud occurs when an employer misclassifies an employee as an independent contractor regardless of whether the misclassification was intentional or based on a mistaken belief that the workers were, in fact, independent contractors. Employers who misclassify workers in this way avoid paying payroll taxes, unemployment insurance taxes, and worker's compensation coverage premiums. The practice of misclassification is illegal and deprives workers of benefits including Workers' Compensation and Unemployment Insurance.
Q: What industries does the Workplace Fraud law apply to?
A: The Workplace Fraud Act applies only to the construction and landscaping industries. Workers in other industries who have questions about worker classification can find additional information by visiting the Joint Enforcement Task Force on Workplace Fraud page on the web or by contacting the Task Force by email.
Q: How do I know if I have been properly classified in the workplace?
A: Different state and federal agencies use different tests to determine whether a worker is an employee or an independent contractor for different purposes. For purposes of the Workplace Fraud Act as well as Maryland's Unemployment Insurance law, the State has adopted what is commonly referred to as the "ABC Test.” Other agencies utilize a common law test of direction and control or an economic realities test for other purposes. Although the tests are not identical, they have certain elements in common. In particular, all of the tests examine the degree of direction and control exercised over the worker and the financial aspects of the relationship.
Under the ABC Test, a worker is presumed to be an employee unless:
- The individual is free from direction and control;
- The individual customarily is customarily engaged in an independent business of the same nature as that involved in the work; and
- The work is outside the usual course of business of the person for whom it is performed OR the work is performed outside any place of business of the person for whom it is performed.
Q: The person or business for whom I work gave me a "Notice to Independent Contractors and Exempt Persons” to complete and I feel that I am an employee rather than an independent contractor or exempt person. What should I do?
A. If you believe that you are not an independent contractor or an "exempt person” as defined under Maryland's Workplace Fraud Act, but rather an employee of the person or business for whom you work, you should contact the Worker Classification Protection Unit by email or by telephone at 410-767-9885. You can also report possible misclassification by filing a Worker Misclassification Reporting Form.
For additional information, contact: