Minnesota Attorney General Keith Ellison celebrated the signing of a significant bill aimed at combating employer misclassification fraud. The new law, which took effect earlier this month, facilitates worker reporting of misclassification fraud, enhances government coordination in investigations, increases penalties for repeat offenders, and allows victims to seek legal recourse for denied wages.
Employer misclassification fraud occurs when employers incorrectly classify full-time employees as independent contractors. This practice deprives employees of essential rights and benefits such as overtime pay, workers' compensation, and earned sick time. The legislation was authored by Representative Emma Greenman and Senator Clare Oumou Verbeten and is based on a policy proposal from Attorney General Ellison’s task force on combatting employer misclassification fraud.
“It is hard to afford your life when your job cheats you out of the pay and benefits you have earned by pretending you are an independent contractor, rather than an employee,” said Attorney General Ellison. “Legitimate independent contractors play an important role in our workforce, but that classification cannot be abused by low-road employers looking to make a buck by misclassifying their workers. Fortunately, the bill signed today will make it easier for both the state of Minnesota and employees themselves to fight back against this affront to working people."
Ellison added, “Minnesotans know there is dignity in a hard day’s work, and we are upholding that dignity by helping workers get the pay and benefits they have earned. I would like to thank Representative Greenman, Senator Oumou Verbeten, and Department of Labor and Industry Commissioner Blissenbach for their extensive work on this bill. I am also grateful to the members of my misclassification task force for lending their time, energy, and talent to this important endeavor, as well as to Governor Walz and Lieutenant Governor Flanagan for their steadfast support.”
The signing follows a report from the Office of Legislative Auditor highlighting the growing problem of misclassification fraud in Minnesota. The report emphasized the need for better coordination between government agencies and quicker resolution of fraud cases—issues addressed by the new legislation.
Additional details about the law's provisions can be found in House Research’s summary of the legislation.
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