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Proposed changes to Maine unemployment fraud law could be used against employers

In recent weeks, the press has extensively covered changes that the LePage administration has proposed to Maine’s unemployment fraud law. Opponents of the proposed changes question the need for the enhanced penalties since unemployment fraud is very rare in Maine. News reports have indicated that Maine has the fifth lowest unemployment fraud rate in the country and the lowest in New England. All of this talk of unemployment fraud has focused on these rare cases of unemployed people knowingly receiving more unemployment benefits than they are entitled to receive. However, there is little, if any, mention of the fact that employers can commit unemployment fraud, too.

Under Maine law, it is a crime for an employer “to avoid or reduce any contribution or other payment required from an employing unit under” Maine’s unemployment insurance laws. Thus, if an employer knowingly misclassifies an employee as an independent contractor, and fails to pay unemployment insurance contributions for that employee, it commits a crime.

If your employer has misclassified you as an independent contractor, and you want to blow the whistle on this illegal activity, you should first contact an experienced employment lawyer to learn about your rights.