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Department details misclassification, wage-theft audits; lawmakers press for stronger penalties and more enforcement resources
Summary
Department auditors reported thousands of audits and millions recovered in unpaid wages and taxes; lawmakers urged stronger penalties and more staff to pursue misclassification and wage theft. The department said it completed thousands of investigations with a relatively small enforcement complement.
Department of Labor and Industry officials told the committee they are pursuing misclassification and wage-theft cases but said enforcement resources remain limited compared with the scale of alleged violations described by lawmakers.
The department's Unemployment Compensation Tax Review Office conducted 4,658 audits on roughly $3.7 billion in payroll and identified 22,262 misclassified or unreported workers, resulting in about $6.7 million in unpaid UC tax liabilities uncovered, testimony said. The department said it referred 389 cases covering 2,974 workers to the Bureau of Labor Law Compliance for fines under Act 72 (construction misclassification), according to the record.
Secretary Walker provided additional enforcement figures: the Bureau of Labor Law Compliance opened roughly 5,700 complaints and completed about 5,500 investigations in the last year. Under wage-payment and collection statutes, the department returned about $4.233 million to 1,476 workers this past year. Under minimum wage and overtime enforcement, the department collected about $254,000 on behalf of 322 workers from 56 employers; prevailing-wage collections totaled about $448,000 from 28 contractors. Child Labor Act fines in the year reached about $1.76 million across 153 employers.
Representative Kinkade and others told officials that national estimates of wage theft run into the billions and urged stronger enforcement and additional funding. Department leaders said they have identified enforcement priorities and have a complement of about 51 staff in the labor law compliance bureau, and that they will re-evaluate requests for additional resources in future budget cycles.
Why it matters: Misclassification and wage theft affect tax revenues, the solvency of insurance and UC funds, and workers' incomes; lawmakers argued it distorts competition for legitimate businesses.
Ending: Representatives urged the department to seek statutory changes recommended by a prior task force and to return with proposals that would increase penalties, funding and enforcement capacity.
