The misclassification of employees as independent contractors is a persistent problem hurting the poor in Philadelphia.

In our service-driven workforce where the “gig economy” is on the rise, the scourge of worker misclassification is increasingly prevalent. Misclassification occurs when employers erroneously label their workers independent contractors even though these workers are employees whose supervisors control the methods and means of their work. When employers misclassify their workers as independent contractors, workers are deprived of vital rights and benefits they enjoy under various laws, including minimum wage, overtime, and collective bargaining protections. Misclassification also has a harmful impact for workers in their federal tax obligations. When a worker is paid on a Form 1099-MISC, with no taxes withheld, rather than on a Form W-2, the taxpayer is burdened with the full 15.3% self-employment tax. As such, 1099ed workers are saddled with both the employer and the employee shares of Social Security and Medicare taxes.