Study: Gov. Patrick to Look at MA's Undergound Economy

Massachusetts Governor Deval Patrick has announced a new study that will analyze the effect employee misclassification has on Massachusetts’ economy.  

Furthering the work of the successful Joint Enforcement Task Force on the Underground Economy and Employee Misclassification created in 2008, the study will look into how businesses engage in various forms of employment fraud.  

Massachusetts has uncharacteristically effective legal standards that presume all Massachusetts workers are employees.

The Patrick administration has been at the forefront of recovering wages on behalf of workers.  Recently released audits by the state show that it recovered $11.5 million in unreported wages for 2,300 employees who had been misclassified as independent contractors.

The new study looks to expand the scope of the group’s prior work by focusing on more industries:

“We have concerns and indications that some significant percentage of the Massachusetts economy is operating in the underground economy,” said Joanne Goldstein, Patrick’s secretary of labor and workforce development. “That deprives the state of revenue, which is critical, and it deprives legitimate businesses of a level playing field.”

David Weil, a professor participating in the study, told the The Boston Globe,

“This will allow us to understand where misclassification is occurring, what the patterns are, and how it is occurring in different kinds of industries.”

He said that his own research has found that employers are becoming increasingly detached from workers, using layers of contractors and subcontractors in a way that insulates them from liability for wage, tax and safety violations.

The study and continued work of the state’s Joint Task Force on the Underground Economy and Worker Misclassification corresponds with the U.S. Department of Labor’s Employee Miscclassification Initiative. Massachusetts is one of 13 participating states.

Go to MA State Page
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