Cowardly Lion Meet The Wizard

Audits, taxes, benefits and fines oh my!  Colorado employers meet up with the Wizard.

Colorado is paving the way for other states trying to halt an employer practice that has become a pandemic in the United States. An illegal practice of intentionally misclassifying workers as a cost cutting measure to avoid payroll taxes, benefits and other employer obligations spurned one states representative to take action. Gov. Bill Ritter decided Wednesday to show offending employers in his state how serious he is about catching would be tax cheats. Ritter signed legislation that contains fines up to $5,000 for each misclassified employee for the first offense, and up to $25,000 per employee for subsequent offenses. “We must do everything we can to help those who are struggling, to keep Coloradans in their jobs and to keep families in their homes,” Ritter said. According to the GAO tax authorities lose $4.7 billion a year.

To make up for the deficit governmental officials are picking the low hanging fruit; the independent contractors and employers who use them. General consensus among the federal and state tax task force is that misclassified workers are a guaranteed revenue stream.   Collecting on those unpaid bills will be a huge undertaking but the reward is a strong motivator for uncovering companies who have improperly classified workers. Under Colorado’s new law, the Department of Labor and Employment has been tasked with conduct a statewide sweep of employers to help refill the states empty coiffeurs.

Well, it won’t be long now until other states get on the tax deficit band wagon with Colorado and the IRS.  After all states like California, New York and Massachusetts are known for cracking down on employer misdeeds.