Miami-Dade County

Florida fails to apply for federal grant to fight worker misclassification

During renovations at the Roosevelt C. Sands Jr. Affordable Housing Complex in Key West, regulators looked the other way as contractors illegally cut costs by misclassifying their workers.
During renovations at the Roosevelt C. Sands Jr. Affordable Housing Complex in Key West, regulators looked the other way as contractors illegally cut costs by misclassifying their workers. Miami Herald

The U.S. Department of Labor divvied up $10 million worth of federal funding among 23 states to fight the problem of worker misclassification, but Florida didn’t get a penny.

That’s because the state didn’t apply for a grant — even though a yearlong Miami Herald and McClatchy Newspapers investigation found misclassification in Florida’s construction industry costs taxpayers $400 million per year in lost state and federal tax revenue.

Misclassification happens when employers claim that their workers are independent contractors instead of full-time employees. The scheme allows companies to evade payroll and unemployment taxes and then undercut law-abiding competitors on bids.

READ THE FULL “CONTRACT TO CHEAT” SERIES

After the Herald series came out, Florida signed an agreement with the federal government to crack down on misclassification.

The office of Gov. Rick Scott did not say why the state had failed to apply for funding. Instead, it directed a reporter late Friday afternoon to contact the Department of Revenue, which did not respond.

$400 millionAmount lost in taxes annually because of misclassification in Florida’s construction industry

Florida did apply for and receive a different grant from the feds: $500,000 to help the state detect and prevent bogus unemployment insurance claims. The state could have applied for both anti-misclassification and anti-unemployment fraud funding. Twenty-two states received funding to combat both problems.

  Comments