Legislation introduced in the state Senate would give the state’s district attorneys the authority to investigate construction employers’ wage-and-hour practices, specifically complaints that some are misclassifying workers in order to gain an unfair competitive advantage.
The sponsor of the bill, state Sen. Mike Stack, D-Philadelphia, cited lax enforcement by the Department of Labor and Industry in investigating allegations of misclassifying employees.
“Since 2011, there has been no completion in the investigation of 66 percent of cases,” said Matt Franchak, Stack’s chief of staff in Harrisburg. “It’s simply taking way too long.”
The bill, SB 1454, stems from Act 72 of 2011, which ensures that independent contractors are indeed independent, using their own tools and equipment free of the direct supervision of their employers. The law outlines requirements for this classification and penalties for abuse.
Franchak said the law is intended to prevent construction employers from getting an unfair advantage on jobs by not having to add costs like unemployment compensation and workers’ compensation in their bids.
The district attorneys would be reimbursed for the costs of their investigations.
L&I spokesperson Theresa Elliott wrote in an email that the department is currently in the process of reviewing SB 1454.
She added that “L&I’s Bureau of Labor Law Compliance actively pursues and investigates all complaints” regarding Act 72. “It is important to note that the law also provides local district attorneys with concurrent jurisdiction to investigate and prosecute Act 72 complaints,” she wrote.
Stack said numerous states have signed agreements with the U.S. Department of Labor to cooperate on enforcement, resulting in more than $18 million in recovered wages for 19,000 workers.
“Pennsylvania’s record of enforcement is a disservice not only to working families, but also to every taxpayer in the state,” Stack said in a statement. “Federal officials understand that misclassification of workers means payroll taxes are not withheld, resulting in reduced tax collections. Everyone pays while a few benefit.”
Franchak said some district attorneys, such as Northampton County’s John Morganelli, have expressed frustration at the lack of enforcement from the state.
The District Attorneys Association has yet to take a position on the bill. Executive Director Richard Long said the group would probably have a response by fall.