Labor Department and IRS Renew Their Memo of Understanding For Employment Tax Referrals.

The U.S. Department of Labor and the IRS have renewed their “Memorandum of Understanding for Employment Tax Referrals” on December 15, 2022 to continue to improve compliance with the laws and regulations administered by the DOL’s Wage and Hour Division (WHD) and the IRS’s Small Business/Self Employed Specialty Employment Tax Unit. 

A news release issued by the WHD that day reported that the MOU added a streamlined process for joint referrals and closer coordination in an effort to stop businesses from misclassifying and denying workers their full wages, benefits, and protections under the law. The WHD stated that the updated MOU also is designed to help the WHD share information and work in concert with the IRS to strengthen enforcement of federal and state laws that protect workers’ rights. In the news release, 

Principal Deputy Wage and Hour Administrator Jessica Looman stated: “We are determined to identify and resolve labor violations by employers who benefit by misclassifying employees as independent contractors and deprive them of the protections of the labor standards laws, we enforce. Renewing our memorandum of understanding with the IRS strengthens our existing partnership by improving referral processes and information sharing to help us better serve the nation’s workers.”