On Monday, the Joint Legislative Audit and Review Commission
(JLARC)[1],
the Virginia General Assembly’s “watchdog,” suggested that the legislature
discuss the possibility of criminalizing the incorrect classification of
workers as independent contractors rather than actual employees.[2]
The suggestion came in conclusion to its study on the classification of workers
in Virginia.
An audit carried out by the Virginia Employment Commission
of 1 percent of Virginia’s employers concluded that 5,639 workers were misclassified
in 2010. JLARC’s review further estimated that the commonwealth could have
nearly 40,000 employers who misclassify their employees.
A number of reasons were given as to why this should concern
Virginians and their legislators. First, employers who incorrectly label their
workforce “independent contractors” are gaining a leg up on employers playing
by the rules. But one suspects that the nearly $28 million in general fund
revenue in 2010 being lost is the primary reason why Virginia’s bureaucratic
machine is looking into this problem with a fine-toothed comb.
While “leveling the playing field” for all of Virginia’s
employers is a laudable goal, collecting more tax revenue should be a subordinate
goal given the commonwealth’s already high levels of taxation.[3]
That is, before Virginia’s legislators begin worrying about how to collect more
tax revenue, let Virginian’s know where all of the other tax money has gone
thus far!
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