In 2010, the United States Department of Labor (USDOL) identified the misclassification of employees as independent contractors as a serious problem.  Most recently, USDOL’s Wage and Hour Division along with the Internal Revenue Service have worked with state agencies to investigate misclassification.  These investigations resulted in $74 million in back wages for more than 102,000 workers.

On Point Technology commends USDOL for its continued efforts to combat employer misclassification. However, more needs to be done and On Point Technology’s has a solution — the Misclassified Worker FraudX™ solution. Built upon the OPTimum framework, the solution enhances State Agencies’ ability to detect and prevent both intentional and unintentional UI tax avoidance stemming from the misclassification of employees as independent contractors.

It employs robust data analysis tools and predictive modeling capabilities to interrogate data attributes from Agency systems as well as from external data sources. Predictive modeling methodologies provide exponentially deeper insight into data than can be achieved through traditional static queries and data analytic techniques.

On Point Technology’s UI experts, data scientists, architects and engineers apply best practices and leverage real world experiences gained by working with other state partners. As criminal tactics become increasingly sophisticated and complex, it is imperative to proactively address tax avoidance scams and misclassified worker schemes.

Features of the Misclassified Worker FraudX™ solution:

  • Identifies, scores and ranks businesses suspected of misclassifying workers
  • Allows for configuration to align with individual state laws, policies and procedures
  • Provides best-practice guidance as to which types of external files are the most effective,
  • Shares and incorporates misclassified worker data from other State Agencies
  • Records results into the OPTimum Tax Audit application or into a legacy application
  • Integrates the Misclassified Worker FraudX™ score into the overarching OPTimum Tax audit selection process, with each factor weighted per user-maintainable business rules
  • Utilizes a range of UI data and related data sources including the Governmental Liaison Data Exchange Program (GLDEP)

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