Virginia employers may see more robust worker misclassification enforcement and enhanced cooperation between state agencies with respect to misclassification issues in the near future. Following the lead of the federal government and other states, Governor Terry McAuliffe’s recent Executive Order, signed on August 14, 2014, calls for the establishment of an interagency task force on worker misclassification and “payroll fraud.”
According to the text of Executive Order 24, the Joint Legislative Audit and Review Commission (JLARC) estimates that worker misclassification has a significant negative impact on Virginia’s state income tax collections. Instead of piecemeal enforcement, JLARC recommended that various state enforcement agencies, including the Virginia Employment Commission, the Department of Labor and Industry, the Department of Professional and Occupational Regulation, the State Corporation Commission’s Bureau of Insurance, the Department of Taxation, and the Workers’ Compensation Commission, work together to target worker misclassification and payroll fraud in the Commonwealth. The Governor’s Executive Order makes JLARC’s recommendation official, adding the above-listed Virginia organizations to the ranks of government agencies who have sought to coordinate efforts in this area.
Among the stated purposes of the Virginia task force are evaluating the enforcement practices of the various agencies, developing procedures for more effective cooperation and joint enforcement, and making recommendations for legislative or administrative reform. A progress report is due to the Governor by December 1, 2014.