Massachusetts has received $269,000 from the federal government to root out businesses that misclassify employees as independent contractors as way to avoid payroll taxes and the cost of workplace benefits.
The federal Labor Department said Tuesday the state could use the money to audit employers or educate employees. Employers who wrongly classify employees as contractors don’t pay into the unemployment insurance or Social Security systems, the Labor Department said.They many also deny them benefits such as overtime and sick leave.
Massachusetts, which has an agreement with federal authorities to share resources to prevent employee misclassification, received the grant through a competitive process, according to a Labor Department. The grant was part of $39 million in allocations to states announced by the department on Tuesday.