Study: Misclassification Costs More Than $50M Per Year in Unpaid Premiums

Misclassification cost the state of Washington’s workers’ compensation system $268 million in unpaid premiums from 2013 to 2017, an average annual loss of $53.6 million, according to a study by the Harvard Law School Labor and Worklife Program. The study found the proportion of businesses misclassifying employees as contractors increased from 5% in 2008 to 14.4% in 2017. Industries with the highest rates of misclassification were construction, clerical services, and hotels and restaurants. According to the report, 19% of employers in the construction industry were misclassifying ...