From The Intelligencer, Chris English reports on the efforts of Pennsylvania legislators to strengthen the laws governing misclassification of workers as independent contractors or employees. Chris writes:
Misuse of the independent contractor designation for workers, primarily in the construction industry, is costing the state and federal governments a combined total of about $300 million in lost revenue, two local state lawmakers said during a news conference Wednesday.
State Reps. John Galloway, D-140, and Perry Warren, D-31, are pushing for passage of two pieces of legislation that would address the problem. One, House Bill 716, would establish a joint agency task force on employee misclassifications. The group would investigate the practice and work toward creating solutions to reduce misclassification throughout Pennsylvania. That bill recently passed the House 198-0, Galloway said.
The other proposed bill, HB 715, would among other provisions tighten the definition of what constitutes an independent contractor to only allow use of the term if a worker’s written contract is project and time specific, with no exceptions.
Also attending the news conference, held at Galloway’s Falls office, to speak in support of the bills were Bryan Allen, chief of staff for state Rep. Tina Davis, D-141, of Bristol Township; Amy Masgay, legislative assistant for state Sen. Steve Santarsiero, D-10, Lower Makefield; and union carpenter Kevin Morrow of Perkasie.
Improperly designating workers as independent contractors gets employers out of paying health and worker’s compensation insurance. If those workers are injured, those needs are often taken care of by the state or federal governments and that places additional burdens on taxpayers, Galloway and Warren said.
Misclassifying workers also leads to the nonpayment or underpayment of state and federal income taxes, they added. The millions in lost revenue could be going toward improving schools and infrastructure and other areas, the two lawmakers said.
“This is done deliberately to cut labor costs, pay less in taxes and avoid paying our working class a fair compensation,” said Galloway, of Falls. “This is a practice that hurts the workers who are entitled to the benefits they’ve rightfully earned, their families that they work hard to provide for, and our economy.
“Employee misclassification is nothing less than theft from our families, friends, neighbors and coworkers, and it creates an uneven playing field for law abiding businesses.”