Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
Workplace Fraud Act (WFA). The state of Maryland has enacted a WFA specifically designed to address issues of employee misclassification in the construction and landscaping industries. The WFA requires employers in the construction and landscaping industries to give an individual classified as an independent contractor or an exempt person with whom they contract notice of their classification and an explanation of what that classification means. A copy of the notice in both English and Spanish is available on Maryland’s Division of Labor and Industry’s website. Employers in the landscaping and construction industries must also keep, for at least 3 years, records containing the following information:
1. The name, address, occupation, and classification of each employee or independent contractor;
2. The rate of pay for each employee or method of payment for each independent contractor;
3. The amount paid each pay period to each employee or independent contractor;
4. For each independent contractor or exempt person hired, the regulations further require that the employer keep at the worksite or place of business: a. A description of the employers’ business or a contract between the employer and the independent contractor or exempt person; b. Forms signed ...