The GAME ON misclassification task force, which is a relatively new effort by various departments in the Louisiana Workforce Commission (LWC), has had some significant successes.
Louisiana Comp Blog sat down with Renita Ward Williams and Ricky Masaracchia to discuss the task force, and how the public can help ensure a fair playing field for all Louisiana employers and workers. Williams has been in her position as the Assistant Secretary of the Unemployment Insurance (UI) division since March 2016. Masaracchia is a 33 year veteran of the LWC and serves as her deputy in UI; he is also Chief of Tax at LWC.
Comp Blog: GAME ON utilizes a range of the Workforce Commission’s resources. Can you explain who makes up the task force?
Williams: GAME ON is comprised of departments within this agency as well as offices external to us. The internal departments are the Office of Unemployment Insurance Administration, the Office of Workers’ Compensation, and the Office of Workforce Development. We’ve added OSHA and Child Labor recently. External to the agency, one of our primary partners is the Louisiana Department of Revenue. We also have a cooperative endeavor with the federal Wage and Hour Division and data sharing agreement with the Internal Revenue Service.
The efforts that GAME ON engages in predate this task force, we began that work back in 2015, but GAME ON is relatively new, 2017. It’s a way to coordinate our resources better. GAME ON is more results oriented – we’re looking at ways to levy additional fines and bring court cases, as opposed to the way it existed before.
Comp Blog: How is a GAME ON audit initiated?
Williams: Everything starts with a tip, whether it is from the business community, or one of our partners in the task force. UI then completes the majority of the investigation, which consists of interviewing the employer and workers, and reviewing financials, among other things. The employer has a right to appeal and to provide additional information before we issue a determination.
Masaracchia: The newest thing we’re doing, as well as what will likely be the most effective thing we do, is to make unannounced site inspections. The inspection is not the audit, it’s just gathering information. Once word gets out that we’re out there making unannounced inspections we expect it to be a big deterrent.
Williams: A lot of the feedback we received from the business community was that we needed unannounced inspections because we wouldn’t catch them any other way. Employers will move workers around or tell misclassified workers to stay home on announced inspection days.
Comp Blog: Who is involved in an unannounced inspection once you receive the tip and decide to move forward with it?
Masaracchia: We are accompanied by the state police, for our security, not to arrest anyone on the spot. From there, it’s as many auditors as each agency can spare. On our first surprise audit, we did one site inspection and had a whole posse, it won’t be that many in the future. We also debrief after each inspection and we do reconnaissance on the tips before we show up.
Williams: In some cases we also rely on confidential informants on site who are able to provide us with intel on where certain companies are located on large sites and how we can find what we’re looking for.
Comp Blog: What details can you share about the most current unannounced inspections?
Masaracchia: For our most recent unannounced inspections, we tried a blitz approach, so we did four site inspections, all different employers, simultaneously. That was a challenge to coordinate, but it makes a big statement. Renita and I have received calls and emails since then saying that the word is getting out in a big way.
Comp Blog: What industries have the most significant issues with misclassification?
Masaracchia: It really runs the gamut. Construction is a major one, hospitality, home health services, even janitorial services. There are really no geographical boundaries within Louisiana for us either, we have agents positioned all around the state.
Williams: It’s also worth noting that this is in addition to one percent of Louisiana employers we’re required to audit annually under federal mandate, which is about 100,000 employers.
Comp Blog: What do the results look like so far?
Masaracchia: For the UI audit program (which precedes GAME ON) over the past three years we’ve completed 3,000 audits, auditing $3 billion in payroll. During that three year period, we discovered nearly 30,000 misclassified workers, $250 million in unreported wages, and $3 million in unreported taxes. We’re considered one of the most effective UI audit programs in the country.
Comp Blog: What do the GAME ON-specific stats look like so far?
Masaracchia: On our inaugural surprise inspection, we discovered nearly 500 misclassified workers and $10 million in unreported wages at just one employer’s job site. Overall, since the beginning of GAME ON on July 1st, 2017, we’ve performed 19 audits. In those audits, 1,100 misclassified workers were identified, $18.5 million in unreported wages were identified, plus $5.4 million in taxable wages and $133,000 in additional unemployment insurance taxes.
Comp Blog: What message would you like to convey to employers with GAME ON?
Masaracchia: We’re looking to promote business, not hinder it, by making competition in Louisiana fair.
Williams: We don’t want to have a chilling effect on business or shut legitimate employers down, but for those employers that use misclassification as a business model, we’re out here.
Have knowledge about employer misclassification? Submit a tip to LWC here.
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