The U.S. Department of Labor (“DOL”), as part of its “worker misclassification initiative,” entered into its 21st memorandum of understanding (“MOU”) with state agencies when it signed a Common Interest Agreement with the Rhode Island Department of Labor and Training, which became effective on May 7, 2015. DOL has entered into similar agreements with state agencies in Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Utah, Washington, Wisconsin and Wyoming. While a principal focus of an MOU is worker misclassification, it can also pertain to other laws over which the DOL has jurisdiction, such as the Employee Retirement Income Security Act of 1974 and the Occupational Safety and Health Act of 1970.
In the Rhode Island MOU, the parties agree – where appropriate and to the extent allowable under the law – to conduct joint investigations, coordinate enforcement activities and make referrals of potential violations of each other’s statutes.
One objective of these agreements is to leverage the enforcement efforts of DOL and the contracting state agencies so that a violation found by one such agency can potentially trigger an examination by another agency. Firms that do business in any of these states should be aware that an adverse audit result by a state agency, e.g., by the Rhode Island Department of Labor and Training, that results in a reclassification of workers to employee status could lead to an audit by the DOL.
