AG would boost fines for firms that misclassify workers

Employers are increasingly misclassifying their employees as contractors to trim costs, so Attorney General Richard Blumenthal and the Chief State’s Attorney’s Office said they want to substantially increase the fines.

“This is cheating, plain and simple,” Blumenthal said about employers labeling full-time employees as independent contractors. “We will no longer tolerate misclassifications.”

Blumenthal said the fact that Linda McMahon’s World Wrestling Entertainment hires independent contractors as wrestlers has nothing to do with the timing of the proposed legislation.

“There is nothing political about our announcement,” said Blumenthal, a Democratic U.S. Senate candidate who eventually could face McMahon, the current leader among three Republicans in the race.

The current fine for misclassification is $300 per incident, and John DeMattia, who heads the Workers Compensation Fraud Bureau within the Chief State’s Attorney’s Office, and Blumenthal are asking legislators to increase the fine to $300 a day per violation.

In the past two years, 350 employers statewide were investigated for misclassifications. How many employees were misclassified was not immediately available.

Blumenthal said the problem is costing the state “hundreds of millions of dollars every year” from the state having to pick up the medical and workers compensation costs for employees deemed independent contractors.

In the construction business, companies that misclassify workers are able to underbid legitimate contractors, said Don Shubert of the Connecticut Construction Industry Association.