Pennsylvania has a strange-sounding law that most of you probably never hear called the "Construction Workplace Misclassification Act." The latest version, effective for the past three years, is designed to prevent unethical contractors from claiming that their employees are "independent contractors," or just letting them work "off the books". This deprives the government of tax revenue and hurts businesses who play by the rules. Most importantly, it hurts the worker, who is denied the protection of employment and labor laws. Though Governor Corbett pledged to abide by this law, enforcement has been nonexistent. That's the reason for a news conference in the Northampton County Courthouse lobby yesterday, featuring several officials and labor leaders. One of them,State Senator Mike Stack, would like to be the next Lieutenant Governor. He picked up some big endorsements.
|Stack shares a laugh with Lisa Boscola|
Both Morganelli and Boscola scoffed at the Department of Labor and Industry's lack of enforcement. Though the law gives the state the authority to impose administrative fines of up to $2,500 per violation and to issue stop work orders, they complained about lax enforcement.
|Boscola disturbed by Labor's nonenforcement|
Senator Stack, who thanked Morganelli and Boscola for their endorsement, stated he called the Labor Department several weeks ago to learn what happened in 2012 and 2013. "I'm a State Senator and I don't know. The silence has been deafening"
He complimented Morganelli for investigating a recent complaint on his own, although Morganelli stated his office has no authority to issue stop work orders.
Stack would like to amend the law to reimburse District Attorneys who undertake their own investigations, calling Morganelli "a true defender of justice" who is "trying to find a way up and out for people."
Kevin Lott, a Business Agent with the Carpenters Union, pointed to a recent study of a similar law in new York.Last year alone, New York's Department of Labor identified 24,000 instances of employees being improperly classified as independent contractors. This translates to $330 million in unreported wages and $12.2 million in unemployment insurance.
"It's a fairness issue," noted Lott, who pointed out that poor enforcement has caused three problems in Pennsylvania. First, the contractors who are cheating have an unfair advantage over those who play by the rules. Second, these cheating contractors are hurting workers, many of them already vulnerable, from important protections. Finally, the state is losing an important source of revenue.