States take action to guarantee workers receive insurance benefits without falling victim to workplace fraud.

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  • States take action to guarantee workers receive insurance benefits without falling victim to workplace fraud.

Numerous states are taking quick and direct action to prevent employers from falsely listing its workers as independent contractors to avoid paying them health insurance benefits through workplace fraud.

Numerous states are taking quick and direct action to prevent employers from falsely listing its workers as independent contractors to avoid paying them health insurance benefits through workplace fraud.

In March 2008, Massachusetts took steps to prevent workplace fraud when Governor Deval Patrick signed an executive order establishing the Joint Task Force JTF) on the Underground Economy and Employee Misclassification. According to the JTF, the "underground economy" represents "off the books" schemes and "misclassification of employees - treating workers who would otherwise be wage or salaried employees as independent contractors in order to conceal their activities and true tax liability from licensing, regulatory, and tax agencies."

In May, Maryland Governor Martin O'Malley signed the Workplace Fraud Act of 2009 to provide tools to crack down on workplace fraud and formally making it against the law "to fail to properly classify workers as employees, and it imposes penalties on those employers who knowingly misclassify their workers." In July an additional Executive Order was signed to initiate a government task force similar to Massachusetts as well.

"This executive order, combined with passage this year of the Workplace Fraud Act, should send the clear message that Maryland will not tolerate employers who try to cheat the system, and that we are committed to arming ourselves with the tools necessary to eradicate this pervasive practice," Governor O 'Malley said in July.

Laws from Maryland's Workplace Fraud act will formally take effect on October 1.

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Posted: August 28, 2009

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