Cohen Seglias Pallas Greenhall & Furman PC’s most recent PA Construction Legislative Update provides an update on House Bill 716. The bill proposes creating a task force to assist with preventing worker misclassification.
From Cohen Seglias Pallas Greenhall & Furman PC:
The Pennsylvania Construction Workplace Misclassification Act, commonly referred to as Act 72, became law in 2011. Act 72 applies only in the construction industry and contains some stiff penalties for contractors who misclassify their workers as “independent contractors” instead of “employees.” The spotlight on the worker misclassification issue continues to shine bright in Harrisburg. House Bill 716, which is currently up for a full Senate vote, would create the “Joint Agency Task Force on the Misclassification of Employees” to scrutinize the enforcement of misclassification issues by Commonwealth Agencies under a number of laws, including Act 72, the Workers Compensation Act, and Unemployment Compensation Act. The Task Force’s focus would include, but not be limited to, the construction industry. The Task Force would also make recommendations on how to boost enforcement regarding misclassification, and educate employers and the general public about properly classifying workers as employees or independent contractors.
Although this issue has received a tremendous amount of attention over the last decade, we continue to see many of our clients caught in the jaws of misclassification issues. Misconceptions about classification abound, such as the erroneous belief that contractors have the ability to “automatically” convert a worker into an independent contractor solely by setting up an LLC, utilizing an independent contractor agreement, and/or issuing an IRS Form 1099 instead of a Form W2. Before treating anyone as an independent contractor, contractors would be well-advised to consult with experienced labor and employment counsel.