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$28M Cash Grab: Virginia Creates Taskforce Against Costly Misclassification and Payroll Fraud

VA Gov. Terry McAuliffeVirginia Governor Terry McAuliffe has signed an executive order establishing a task force to combat employee misclassification and payroll fraud.

Using state and national studies on the subject, it is estimated that worker misclassification costs Virginia nearly $28 million in annual income tax collections.  Executive Order 24 directs the state to create an interagency taskforce to help find ways to crack down on this costly practice.  In his EO, McAuliffe writes:

“Every Virginian who works hard and follows the rules should get the pay and benefits that they deserve.  This executive order will begin a process to ensure that employers throughout the Commonwealth follow the same rules when it comes to benefits and pay for their employees.”

The chair of the taskforce will be the Sec­re­tary of Com­merce and Trade. The group will include rep­re­sen­ta­tives from 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.  

According to the EO:

The purpose of the Taskforce is to develop and implement a comprehensive plan with measurable goals to reduce worker misclassification and payroll fraud in Virginia. The activities of the Taskforce should include, but not be limited to:

1. Review statutes and regulations related to worker misclassification and payroll fraud;
2. Evaluate current enforcement practices of the agencies involved;
3. Develop procedures for more effective inter-agency cooperation and joint enforcement;
4. Implement a pilot project for joint enforcement;
5. Develop educational materials and an outreach strategy for employers;
6. Advise on any technological improvements in worker misclassification and payroll fraud detection;
7. Recommend any appropriate changes to relevant legislation or administrative rules.

A work plan and report on the progress of the taskforce are due on the Governor’s desk December 1st.

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