MISCLASSIFIED IN MASS:

Employers seeking to avoid Massachusetts payroll taxes and some employee benefits are wrongly classifying thousands of workers as self-employed or independent contractors, according to a report by the University of Massachusetts and Harvard University. Out of 194,000 employers in the Commonwealth, 36,531 employers misclassified up to 248,000 workers, the researchers found. “Employers who do this do not have to carry any responsibility for the worker,” said Elaine Bernard, executive director of the Labor and Worklife Program at Harvard Law School. “If they list workers as employees, they must share in the payment of Social Security taxes, health care, pensions, unemployment insurance and other benefits. If they misclassify workers, they do not have to pay these hidden costs of employment.” The study found that 17 percent of all audited employers in transportation and utilities misclassified workers. Also, 16.1 percent of businesses in education and health services misclassified workers, 14.3 percent of those in information services, 13.5 percent of the employers in professional and business services and 11.4 percent of those in construction. According to the study, 48 percent of the approximately 19,000 Massachusetts workers in construction are misclassified as independent.

Topics Massachusetts