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05/21/2024 10:04 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20230&cosponId=41517
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House of Representatives
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted: October 2, 2023 02:25 PM
From: Representative Kyle Donahue
To: All House members
Subject: Strengthening the Construction Workplace Misclassification Act
 
In the near future, I plan to introduce companion legislation to Senate Bill 577, which was introduced by Senators Kane, Tartaglione, and L. Williams, to strengthen and improve the Construction Workplace Misclassification Act (Act 72 of 2010).
 
Our construction industry is filled with hardworking professionals. These individuals work tirelessly, every day, to build our homes, offices, hospitals, roads, and other crucial infrastructure. This industry supplies over 230,000 jobs and has an economic impact of over $1 billion in Pennsylvania alone, according to the U.S. Bureau of Labor Statistics. Construction jobs should be good, family-sustaining jobs with benefits for Pennsylvanians; however, some contractors intentionally misclassify construction workers as independent contractors.
 
This misclassification cheats workers out of salaries, benefits, and important worker protections like unemployment and workers' compensation. Misclassified workers do not qualify for sick pay, are not guaranteed paid time off, and are not protected by OSHA. Despite completing the exact same work, misclassified workers receive fewer protections than properly classified workers. 
 
Misclassification also cheats Pennsylvania taxpayers of revenue. The Keystone Research Center estimates that misclassification of construction employees in Pennsylvania deprives Pennsylvania of $83 million in worker compensation premiums, $47 million in state income taxes, and $11 million in unemployment compensation taxes.
 
My legislation would strengthen and improve Act 72 by increasing penalties on contractors who misclassify workers and expanding the purview of the Attorney General and District Attorneys to investigate and prosecute worker misclassification. Additionally, my bill permits misclassified workers to pursue a private right of action. We must ensure working Pennsylvanians get paid what they deserve.
 
Misclassifying employees as independent contractors robs workers and Pennsylvania taxpayers. Employers who misclassify their workers do so to take advantage of them, steal workers’ wages and benefits, and ignore proper safety protocols and training. My legislation will prevent the continued exploitation of workers through misclassification and strengthen our existing law to protect Pennsylvania’s construction workers.
 



Introduced as HB1751