BALTIMORE, MD—A new report from Maryland’s Joint Enforcement Task Force on Workplace Fraud (JETF) reveals a significant problem of worker misclassification in the state, costing thousands of workers crucial workplace protections and millions in tax revenue. In 2024, Task Force agencies identified over 5,500 misclassified workers through their enforcement actions.

This misclassification resulted in over $36 million in unreported taxable wages being uncovered through Unemployment Insurance audits in the same year. The report highlights the impact of this issue on various sectors and occupations, emphasizing how it deprives workers of basic rights like minimum wage, overtime pay, health insurance, unemployment benefits, and workers’ compensation. The report also notes that unpaid taxes due to misclassification lower state revenue, impacting funding for critical public services.

“Hardworking Marylanders should be paid what they are owed and given the benefits to which they are entitled,” said Maryland Attorney General Anthony Brown. “When they’re not, it hurts not just the victims of workplace fraud and the businesses that follow the rules, but the entire State of Maryland, which loses out on valuable tax dollars.”

The report also highlights the unfair competitive advantage gained by businesses that engage in misclassification, shifting costs onto workers, taxpayers, and society as a whole. “Workplace fraud hurts Maryland’s ability to create quality jobs and grow the middle class,” stated Maryland Secretary of Labor and Taskforce Chair Portia Wu.

Established to combat this growing problem, the JETF, chaired by Secretary Wu and including Attorney General Brown and Comptroller Brooke E. Lierman, emphasizes a coordinated approach to enforcement and data sharing among various state agencies.

“Misclassifying workers is not an acceptable business practice, and it is alarming to see the rate at which some employers are engaged in this egregious behavior,” said Comptroller Lierman. “I am committed to protecting workers and supporting an ethical and prosperous business environment in Maryland. The Office of the Comptroller will continue to partner with other agencies, unions, and anyone interested to aggressively pursue lawbreakers robbing workers and the state of much needed resources.” The JETF is committed to holding these employers accountable, ensuring compliance with labor laws, and pursuing restitution, back taxes, and unemployment insurance contributions where necessary.

Workers unsure about their classification or suspecting misclassification are encouraged to contact the Maryland Division of Labor & Industry at [email protected]. The full report is available on the Maryland Department of Labor website (PDF).

This article was written with the assistance of AI and reviewed by a human editor.

Photo by Pixabay from Pexels