Misclassifying employees as independent contractors to cut costs, including on WC insurance, is prohibited with the passage of SB 909 of 2009, also known as the Maryland Workplace Fraud Act of 2009. Passed by the state legislature in April of 2009 and signed by Gov. O’Malley that May, the Act stipulates that for the purposes of enforcement, a presumption that work performed by an individual paid by an employer creates an employer-employee relationship.

The language establishes investigation procedures for the Commissioner of Labor and Industry, as well as provides for civil penalties in the event of both an intentional (“knowingly misclassify”) and unintentional (“improperly misclassify”) infraction. The law took effect on Oct. 1, 2009 and is specific to the construction and landscaping industries. The passage of this bill in Maryland mirrors a national trend of implementing similar legislation throughout the country.  Contact us if you want to know more about the Maryland Workplace Fraud Act of 2009.

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