Sen. Rice Moves to Stop Employee Misclassification and Increase State Revenues

State Sen. Andrew Rice has filed legislation to stop employers from improperly misclassifying workers as “independent contractors” in order to avoid paying unemployment and other taxes. Senate Bill 1384 would allow the Oklahoma Tax Commission, Oklahoma Workers’ Compensation Court and Oklahoma Employment Security Commission to share information and coordinate investigative and enforcement efforts in order to find employers who intentionally misclassify individuals as independent contractors rather than employees.

“This is an employer and worker fairness issue. The overwhelming majority of Oklahoma businesses properly classify workers, but the few who do not play by the rules are cheating their employees and fellow tax payers,” said Rice, D-Oklahoma City. “This bill would discourage further employee misclassification, protect employee benefits, and would increase state revenue by recovering those payroll taxes that currently aren’t being paid, and should be.”

Rice went on to explain that when employees are misclassified they may not be covered under certain antidiscrimination, leave and labor standards laws, or have access to employer-provided health insurance coverage and pension plans. Misclassification can also affect how federal and state programs, such as payment of taxes and payments into state workers’ compensation and unemployment insurance programs, are administered.

The measure would also allow a database of information to be created, which would be accessible by agency representatives responsible for enforcement.