On March 12, 2008, Governor Deval L. Patrick signed Executive Order #499 establishing the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification (Task Force). Charged with coordinating the efforts of multiple state agencies to stamp out fraudulent employment activities, the Task Force is working to level the playing field in order to increase fair business competition.
Collaborative in approach, participation in the Task Force has grown from nine member agencies to over 15 state agencies, including representatives from multiple constitutional offices. Task Force partners share information, and come together with a common purpose: to bring businesses and individuals into compliance with applicable state labor, licensing and tax laws.
To date, the Task Force has recovered millions in revenue that otherwise would have gone unpaid or uncollected. Additionally, hundreds of investigations have commenced as a result of Task Force referrals. The Task Force receives hundreds of tips, complaints, and referrals, annually. The JTF maintains a toll-free referral line, 1-877-96-LABOR, and online complaint system for businesses and individuals seeking information or to lodge complaints about suspected cases of fraud and misclassification.
Costs of the Underground Economy
Why tackle the underground economy? The underground economy and worker misclassification is not a new phenomenon or one which exists just in Massachusetts.
Most businesses are law-abiding and responsible, treat their employees fairly, and stand behind the goods and services they sell. These legitimate businesses often wind up paying higher costs when other businesses evade the law. Businesses in the underground economy pay workers sub-minimum wage or "off the books", illegally misclassifying their employees to avoid paying for unemployment or workers' compensation insurance and refusing to withhold taxes.
When the underground economy is allowed to flourish, workers are denied basic workplace rights and protections, legitimate businesses find they cannot compete and must shut down, consumers are subject to unregulated goods and unlicensed services and Massachusetts is cheated out of revenue that could otherwise fund worthy programs and services.
Under the directive of the Governor's Executive Order, the Task Force is chaired by Joanne F. Goldstein, Secretary of the Executive Office of Labor and Workforce Development - "Workplace fraud and misclassification impacts businesses and workers in every industry and poses serious consequences. I am proud of what this Task Force has accomplished and honored to serve as its chair," said Secretary Goldstein.
The Task Force consists of:
Executive Office of Labor and Workforce Development
Executive Office of Administration and Finance
Executive Office of Health and Human Services
Executive Office of Housing and Economic Development
Executive Office of Public Safety and Security
Office of the Attorney General
Office of the Treasurer
Office of Consumer Affairs and Business Regulation
For additional information about the Task Force and to read the Task Force Annual Report, visit http://www.mass.gov/lwd/jtf