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Alaska Department of Labor and U.S. DOL Agree to Work Together Against Misclassification

The U.S. Department of Labor (“U.S. DOL”) and theAlaska Department of Labor and Workforce Development recently signed a memorandum of understanding to share information and conduct joint investigations regarding independent contractor misclassification.  The agreement is part of the U.S. DOL’s Misclassification Initiative, the goal of which is to prevent, detect, and remedy employee misclassification.  Just last month Kentucky’s Labor Cabinet entered into a similar agreement.  Alaska is the 25th state to sign a memorandum of understanding with the Department of Labor as part of its misclassification initiative. The other states signing the memorandum are Alabama, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Rhode Island, Texas, Utah, Washington, Wisconsin and Wyoming.

The coordinated effort between the U.S. DOL and participating states raises the stakes for companies who utilize independent contractors.  In the past, a company in Alaska might pay a single fine to a state agency for not making proper unemployment insurance payments due to misclassification of its workers.  Under the new agreement, Alaska will now share this information with the U.S. DOL, which may opt to cooperate in the underlying investigation, or conduct a separate investigation.  As such, companies in Alaska, like those in the 24 other states that have signed memoranda with the U.S. DOL, should expect that any misclassification inquiry will automatically expand to include both state and federal agencies, thereby increasing the scrutiny on such companies and the risks associated with a misclassification determination.

© 2020 Proskauer Rose LLP.

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About this Author

Guy Brenner, Labor Attorney, Proskauer Rose, arbitration proceedings Lawyer
Partner

Guy Brenner is a partner in the Labor & Employment Law Department and co-head of the Non-Compete & Trade Secrets Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues,...

202-416-6830
Carolyn M Dellatore, Labor Employment Attorney, Proskauer Rose law firm
Associate

Carolyn M. Dellatore is an Associate in the Labor & Employment Law Department and a member of the Employment Law Counseling & Training Group, resident in the Newark office. Her practice focuses on the representation and counseling of employers in all areas of employment and labor relations.

973-274-6032