Maryland’s Crackdown on Workplace Fraud Uncovers Thousands of Misclassified Workers

Workplace fraud, including employee misclassification and off-the-books payments, remains a widespread issue in Maryland, particularly in industries such as construction, landscaping, home healthcare, and janitorial services. The Joint Enforcement Task Force on Workplace Fraud, re-established in 2024 under Governor Wes Moore’s executive order, is taking significant steps to address these violations.

In 2024, Task Force agencies uncovered 5,595 misclassified workers, resulting in $36 million in unreported taxable wages and $3.5 million in tax penalties. The enforcement efforts focused on coordinated investigations, data-sharing agreements, and increased audits to detect and deter misclassification. Notably, the construction industry saw a high volume of violations, contributing to significant losses in wages, tax revenue, and workers’ benefits.

To strengthen enforcement, the Task Force recommends policies such as holding general contractors accountable for subcontractor violations, increasing penalties, expanding the Workplace Fraud Act to other industries, and creating financial incentives for compliant businesses. These measures aim to level the playing field for law-abiding businesses, protect workers, and boost state revenue.

As Maryland ramps up enforcement efforts, businesses are urged to ensure compliance with employment classification laws to avoid costly penalties and legal action.