Ohio to Crack Down on Employee Misclassification

Ohio Attorney General Richard Cordray announced that state agencies are collaborating to combat the misclassification of employees as independent contractors to avoid taxes and workers’ compensation premiums.

Cordray’s office estimates that the annual costs from worker misclassification may be $100 million for unemployment compensation, more than $510 million in workers’ compensation premiums and almost $180 million in forgone state income tax revenues. Additionally, misclassification is estimated to have cost Ohio cities and villages more than $100 million in local income tax revenues in 2006, and cost school districts $7.8 million in 2008.