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