A bill that would create a joint agency taskforce to address the misclassification of employees passed the Senate Tuesday and moves to Gov. Tom Wolf for his signature.
House Bill 716 would amend the Administrative Code of 1929 to create the Joint Agency Talk Force on the Misclassification of Employees. The taskforce would examine the state’s current classification and enforcement system. It also would make recommendations to strengthen enforcement and educate employers and the public on employee classification.
The taskforce’s members would include four people with experience in an industry affected by misclassification who will be appointed by the General Assembly caucuses, the state secretary of revenue, the attorney general, and the secretary of labor and industry.
Intentionally misclassifying employee labor often involves taking advantage of loopholes to classify workers as independent contractors to avoid paying higher wages and taxes.
“Pennsylvania also could be losing $200 million or more a year in federal income taxes, $10 million in unemployment taxes, at least $15 million in income tax revenues, and as much as $83 million in workers compensation premiums,” state Rep. John Galloway (D-Bucks County), who introduced the bill, said. A misclassified worker also loses an estimated $6,000 in overtime pay due to this illegal practice.