Rhode Island § 42-156-2 - Underground Economy and Employee Misclassification Act

§ 42-156-2. Declaration of purpose.

The general assembly finds and declares that this state’s economy, its workers and its businesses are harmed by the existence of an illegal underground economy in which individuals and businesses conceal their activities from government licensing, regulatory and taxing authorities. The underground economy and, in particular, the practice of employee misclassification:

(1) Exploits vulnerable workers and deprives them of legal benefits and protections;

(2) Gives unlawful businesses an unfair competitive advantage over lawful businesses by illegally driving down violators’ taxes, wages, and other overhead costs;

(3) Defrauds the government of substantial tax revenues; and

(4) Harms consumers who suffer at the hands of unlicensed businesses that fail to maintain minimum levels of skills and knowledge.

The creation of a task force has proven to be an effective mechanism for enhancing interagency cooperation and information sharing.