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FOR IMMEDIATE RELEASE |
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State
Rep. Marc Gergely |
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House approves labor bill targeting unfair employer practices
Gergely involved in securing passage
HARRISBURG, May 6 – The Pennsylvania House of Representatives approved a bill this week that would penalize employers who misclassify their workers to avoid paying taxes and workers’ compensation premiums.
As acting chairman of the House Labor Relations Committee, state Rep. Marc Gergely, D-Allegheny, helped to negotiate and achieve final passage of the construction workplace fraud bill in the House.
"It has become common practice for some in the construction industry to misclassify their workers as independent contractors to avoid paying their fair share of taxes and benefits to workers in order to gain a competitive advantage over other businesses," Gergely said.
"This bill would stop that practice to make sure all construction workers, such as carpenters, plumbers and laborers, are treated fairly. I was glad to have played a role in getting this through the House."
House Bill 400 would require people who work in the construction industry to be employees of the party that pays their wages unless they can prove they are legitimate independent contractors. That would mean that the service or services they performed are outside of the usual course of the business of that particular employer; and that they are customarily engaged in an independently established trade, occupation, profession or business.
Gergely said the intentional misclassification of construction workers is driving down wages and living standards for Pennsylvania workers. He also said some workers are not told about their classification as independent contractors by their employers. As a result, they do not file the tax forms required by the IRS for independent contractors, which can put them in violation of federal law.
The bill would make the intentional misclassification of an employee a third-degree felony and impose fines. Misclassification due to negligence would be a summary offense with fines.
The bill has been sent to the Senate for consideration.
Gergely is vice chairman of the committee, but illness of the chairman has required Gergely to assume the chairman's responsibilities.