Process Pressure on Payroll Fraud and Employee Misclassification meets to construct on 2020 Report, suggestions

MADISON – Governor Tony Evers’ Joint Enforcement Task Force on Fraud and Worker Misclassification met on Thursday December 10th to discuss implementation of 2020 recommendations and plans for the coming year.
The task force released its first report earlier this year, which contained several recommendations to better protect Wisconsin workers and companies who comply with the law against the practice of misclassifying workers and committing payroll fraud. Recommendations included the creation of a coordinated cross-agency enforcement team and a registration program for contractors.
The Ministry of Personnel Development (DWD) expressed its support and commitment to advance the recommendations in its budget proposal presented to the governor in September.
“The COVID-19 pandemic has shown how vulnerable some of our employees are when they suddenly become unemployed, become infected with a virus at work or have to look after a sick family member,” said DWD Deputy Deputy Secretary Danielle Williams , Task force chair, said. “Although the report was published earlier this year, 2020 highlighted the importance of enforcing our labor protection laws, which are tied to the relationship between employer and employee. While the federal government has stepped in to provide short-term protection to those who might otherwise not be covered by certain programs, we all need to ensure that workers are properly classified over the long term. “
The task force planned to invite the public to its January meeting to hear directly from workers and employers directly affected by a misclassification.
“Gov. Evers has emphasized its desire to hear directly from Wisconsin residents to help develop its two-year budget, “said Williams. “We look forward to giving the public the opportunity to share their personal stories about how these issues have directly affected them and their families, so that the governor and ultimately state lawmakers can understand the importance of advancement on these issues before theirs Eyes fully understand budget considerations 2021. “
At the meeting on Thursday, members discussed how the state government can help educate employers about the rules, requirements and penalties related to employee misclassification. They heard from Patti Epstein, Corporate and Consumer Services Administrator at the Department of Financial Institutions, about the role of DFI in registering new business entities to see how DFI can help distribute informational materials to prevent potential breaches.
“Our role as the business registration department is to receive, process and maintain business records,” said Epstein. “We are able to educate companies about information they may not be aware of and look forward to working with the task force and across government agencies to educate employers about employee misclassification through material with new company registrations.”
Cindy Buchko, General Counsel of the Construction Business Group, also led a discussion on how CBG’s insurance fraud investigators often uncover cases of illegal human trafficking and the employment agencies.
“There seems to be a misconception that payroll fraud is victimless. However, there is a real and direct link between wage fraud and human trafficking, ”Buchko said. The exploitation of workers through wage theft, threats of violence and coercion is a trafficking tool for human traffickers and part of the wage fraud business model. Greater enforcement of laws banning payroll fraud will make it more difficult for traffickers to act. “
Members also received information from Deputy Secretary of the Treasury (DOR), Maria Guerra Lapacek, about the development of the Interagency Coordinated Enforcement Team, which will facilitate research into worker misclassification and enforcement efforts through improvements in data sharing between government agencies.
Steve Peters, DWD Employee Compensation Administrators Department, and Mark Reihl, Unemployment Insurance Administrators Department, also summarized the activities of their respective Working Groups on Employee Compensation Fraud and Upstream Liability.

For more information on the Joint Enforcement Task Force on Wage Fraud and Worker Misclassification, please visit https://dwd.wisconsin.gov/misclassification/.

For more information on employee misclassification, see https://dwd.wisconsin.gov/worker-classification/ui/.