State lawmakers committed to ending misclassification of workers

LEVITTOWN, Sept. 4 – State lawmakers hosted a press conference Wednesday to raise awareness about wage theft and the illegal misclassification of workers as independent contractors that costs Pennsylvania hundreds of millions of dollars every year.

State Rep. John Galloway has sponsored multiple bills to combat misclassification, including H.B. 716, which calls for the formation of a task force to examine the issue. The task force would investigate the practice of employee misclassification and develop a plan to reduce this practice. It would also determine the amount of money lost annually to the General Fund, Workmen’s Compensation Administration Fund and Unemployment Compensation Trust Fund because of employee misclassification.

“A whole cottage industry has emerged to teach people how to break laws and misclassify workers as independent contractors,” Galloway said. “By taking advantage of loopholes, employers deliberately cut labor costs, pay fewer tax dollars and avoid paying our working people a fair day’s wage for a fair day’s work.

“Pennsylvania may be losing $200 million or more a year in federal income taxes in this illegal practice. What we’re talking about is money: More than anything else this is a revenue bill. We’re talking about recouping hundreds of millions of dollars lost every single year.”  

Galloway, D-Bucks, and state Rep. Perry Warren, D-Bucks, said they hope the bill eventually becomes law as part of a bipartisan effort to end misclassification.

“This bill is about more than just doing the right thing,” said Warren. “If we close the loopholes that currently exist, this legislation will drive revenue back into the Commonwealth of Pennsylvania.

“House Bill 716 passed unanimously in the House of Representatives; however, it has not yet passed in the Senate. And we need to bring attention to this bill and make sure it gets to the finish line and becomes law in Pennsylvania.”

State Sen. Steve Santarsiero, D-Bucks, also offered his support. 

“Misclassifying employees seriously undermines the hard work of Pennsylvanians,” Santarsiero said. “This legislation is an important first step in ensuring employees are fairly compensated for their work.”