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States, IRS join home builder investigation

A probe of the hiring and wage practices of some of the nation’s largest home builders has widened to include the Internal Revenue Services and labor officials from nearly a dozen states, according to an article in the Wall Street Journal. 

The investigation, launched in August by the U.S. Department of Labor, is looking at whether home builders and some of the companies they do business with routinely misclassify workers as independent contractors rather than employees. Another area of inquiry is possible violations of labor laws that guarantee minimum wage, overtime pay and benefits.

Labor Secretary Hilda Solis, IRS Commissioner Douglas Shulman, and top labor officials from almost a dozen states have agreed to share information and work together on enforcement efforts. Businesses can then be subject to multiple fines because they can be charged with state and federal violations. States that have agreed to work with the Labor Department so far include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. Labor officials from New York and Illinois plan to sign up in the near future.

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