DOL and IRS Renew MOU to Improve Joint Effort to Combat Employee Misclassification
The U.S. Department of Labor (DOL) and the Internal Revenue Services (IRS) announced the renewal of a memorandum of understanding (MOU) and a new streamlined process for joint referrals and joint coordination to stop businesses from misclassifying workers and denying them their full wages, benefits, and protections under the law.
In 2011, DOL’s Wage and Hour Division (WHD) and the IRS entered a memorandum of understanding to enable both agencies to use their resources to promote employer compliance with obligations to pay employees and related employment taxes. Since then, the WHD and IRS have shared information when an investigation discovered that an employer had misclassified employees. By sharing information, the agencies can reduce the illegal use of misclassification and the tax gap while improving compliance with federal labor laws.
The updated memorandum of understanding will help WHD share information and work in concert with the IRS to strengthen enforcement of federal and state laws that protect workers’ rights.
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