As if record-high IRS enforcement revenue wasn't bad enough the Department of Labor (DOL) has been racking up record fine collections of its own. To wit, last year the DOL reported recovering a record high $304 million dollars redistributed from employers to workers because those employers are alleged to have misclassified those same workers as 1099 reportable independent contractors when the DOL found them to be W-2 reportable workers.

In addition and in recent years the DOL has been running a Payroll Audit Independent Determination (PAID) program.  PAID is a compliance initiative that helps workers receive more back wages due in an expedited manner – without having to wait for lengthy investigations to conclude and court cases to resolve. Meaning it is even easier than ever for a disgruntled worker to go after your organization. But that's not all.

In April of this year the DOL won a nearly $130,000 judgment against a Virginia home care company that DOL lawyers said misclassified workers as independent contractors and then failed to pay them overtime. But that's not the key takeaway. If you are in accounts payable or tax (or are a CPA advising a business) you should be telling management what else the court did. In a stunning new development the court made the owner of the company—At Home Personal Care Services LLC—personally liable for the unpaid wages and additional liquidated damages.

Furthermore, earlier this year the DOL also won a $1.2 million settlement against another home care business and filed similar lawsuits against at least three other providers. The DOL’s Wage and Hour Division is also seeking to hold the owners of those companies in Missouri, Pennsylvania, and Wisconsin personally liable for unpaid overtime.

This is a huge new change in how the DOL operates. Traditionally, personal liability has been reserved for contracting with Al Queda or ISIS or some other banned organization or individual (with this liability coming from the Treasury Department's Office of Foreign Asset Control). But now direct personal liability is being extended to the actual individuals calling the shots at companies who are being found to have mistakenly classified workers as 1099 contractors.

Please be careful going forward and make sure to tell management what is going on. Accounts Payable is traditionally on the front-line in noticing these situations and you need management's support in terms of training dollars and resources if you are going to be able to protect not only your company but management itself from such liability. And we know what you may think of management - so before you get snarky here remember that if such a lawsuit or DOL initiated audit arises guess who management is going to look at in terms of assigning blame?