This bill requires annual reports on worker misclassification from partnership entities within the Intergovernmental Misclassification Enforcement and Education Partnership. Starting March 1, 2026, these entities must provide estimates of:

1. The number of misclassified workers.
2. The financial impact on affected workers.
3. The effect on law-abiding businesses.
4. Industry-specific misclassification rates to guide enforcement priorities.

Additionally, state agencies must report on the financial impact of misclassification on:

• The unemployment insurance trust fund and related benefits.
• State tax revenues.
• The workers’ compensation fund and insurance rates.

The bill also includes appropriations for fiscal years 2026 and 2027 to support misclassification fraud analysis by the Departments of Labor and Industry, Revenue, Employment and Economic Development, Commerce, and the Attorney General’s Office. These funds will be used to estimate misclassification rates and assess financial impacts on government programs.