2010 Salute To The Leadership: SEAL Award Recipient State of New York Joint Enforcement Task Force on Employee Misclassification

Oct 01, 2010

The Workforce ATM

2010 Salute To The Leadership

State Excellence Award for Leadership
SEAL Award
Presented to

Colleen Gardner, Commissioner and
Jennifer Brand, JETF Executive Director, New York Department of Labor

2010 SEAL Award Recipient Colleen Gardner State of New York
Joint Enforcement Task Force on Employee Misclassification

The SEAL Award honors a state for a workforce related program, project or initiative, which addresses an issue or challenge and results in significant improvement of service or performance.

Since its creation in September 2007, the New York State Joint Enforcement Task Force on Employee Misclassifi cation (JETF) has been addressing the serious and pervasive problem of employee misclassification. In the first three years of its existence, the JETF brought about an unprecedented level of collaboration between state agencies, achieved impressive enforcement results including finding over $500 million in unreported payroll, and took a leadership role in working with other states and the federal government in addressing this important issue.

A worker is considered "misclassified" any time he or she is improperly denied the benefi ts and protections provided to an "employee" as that term is defined by law. Misclassification hurts workers who are deprived of their employment rights under state and federal law. It also hurts legitimate businesses that have to compete against businesses illegally cutting costs by misclassifying workers. Finally, it hurts the government which does not receive appropriate employment and income taxes.

In a 2007 study, Cornell University documented the growth of worker misclassification. Cornell estimated that each year approximately 10.3 percent of New York State's private sector workforce is misclassified. The JETF was created by Executive Order in September 2007 to address this widespread and harmful problem. The Task Force was charged with:

  • Sharing information and referrals among agency partners and pooling and targeting investigative and enforcement resources;
  • Identifying significant cases of employee misclassification which should be investigated jointly;
  • Developing strategies for systematically investigating employee misclassification in industries in which misclassification is most common; 2010 SEAL Award Recipient Jennifer Brand
  • Facilitating the filing of complaints;
  • Working cooperatively with business, labor, and community groups to identify and prevent misclassification;
  • Soliciting the cooperation of local District Attorneys and other law enforcement agencies and referring appropriate cases for criminal prosecution; and
  • Proposing administrative, legislative, and regulatory changes to prevent misclassification from occurring.
The Task Force uses joint-enforcement sweeps, coordinated investigations, referrals of audit results, and data sharing to accomplish these goals. Investigators in one subject area now know their counterparts in other areas and have procedures in place to work on cases together or to share tips and information. The Task Force has raised the level of scrutiny given to misclassification cases. Joint sweep and enforcement cases are chosen strategically and are evaluated in a coordinated fashion. Strategies are pursued in each case for the greatest deterrent effect including referring the most egregious cases for criminal prosecution. In the fall of 2007, the JETF also conducted comprehensive cross-training of investigators from their partner agencies to help them recognize violations in other subject areas; to share investigative and interviewing techniques; and to increase awareness of misclassifi cation issues.

These efforts have produced very impressive enforcement results. From September 2007 through June 30, 2010, the overall efforts of the JETF resulted in 72 enforcement sweeps; the discovery of nearly 40,500 misclassified workers and over $540 million in unreported wages; and the assessment of $16.3 million in unemployment insurance taxes and over $14 million in unpaid wages. The JETF also engages in extensive outreach and education to business groups, employers, unions, worker centers, and employees. This spring, the JETF worked with Governor David Paterson, the State Legislature, and business and labor groups on the New York State Fair Play Act which will strengthen enforcement of labor laws in the construction industry.

New York has been a national leader in working with other states to address misclassification. In October 2009, New York and Massachusetts co-sponsored a Northeast regional summit on misclassification attended by nine states. Since the conference, JETF Executive Director Jennifer Brand has moderated monthly calls between these states to share information and strategies. Twelve states have formed misclassification task forces since New York started the JETF and Executive Director Jennifer Brand has met with many of these states to assist them in getting started and to share strategies and documents. Ms. Brand also spoke about misclassification at the national meetings of both NASWA and ILSA (Interstate Labor Standards Association) in 2009.

[Download the 2010 Salute to Leadership Awards Booklet Download PDF Version]