Georgia labor officials say audits and penalties target worker misclassification; online reporting remains available

Lawmakers pressed Georgia Department of Labor officials about worker misclassification and how the agency enforces the law. Denise Beckwith, identified in testimony as head of the UI (tax) team, told the committee that GDOL receives misclassification reports, runs audits of employer accounting records, and coordinates closely with the Internal Revenue Service on those reviews. "When we do get reports of misclassification, we do perform audits," Beckwith said.

Beckwith said audits can result in required corrected filings, penalties and interest if employers fail to pay unemployment taxes that should have been paid. Holmes told the committee the department has requested additional tax agents in the governor's recommended FY'27 budget so the agency can "do the auditing piece on the front end and have more agents to collect on those penalties."

Officials said GDOL maintains an online reporting system where workers or others can submit misclassification complaints. Members of the committee raised concerns about retaliation protections for complainants; agency staff said the reporting system routes complaints to the tax division for review and that the department is aware of retaliation risks and avenues to address them.

Committee members also asked whether providing employee benefits to a contractor would be dispositive of employee status under the misclassification statute; testimony from the legal team characterized such benefits as a "strong factor" but not necessarily dispositive.

Holmes and staff encouraged legislators to support increased enforcement resources and said GDOL will follow up with members offline to address outstanding procedural questions about the advisory council, transparency, and the appeals process.