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Pennsylvania Introduces New Bill to Tackle Gig Worker Misclassification

By  |  June 25, 2024

A new bill introduced in the Pennsylvania State House aims to address the growing issue of gig worker misclassification and strengthen the enforcement of labor laws. The legislation seeks to provide more protections for workers who have been erroneously classified as independent contractors, often resulting in the loss of critical benefits and legal safeguards.

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    Misclassified workers frequently miss out on essential protections such as minimum wage and overtime pay. They also lose eligibility for unemployment compensation, health insurance, worker’s compensation, and the protections provided by the National Labor Relations Act. This misclassification issue has become increasingly prevalent since the pandemic, with many employers opting for the 1099 designation for independent contractors, particularly in the healthcare sector.

    Gerhardt, a representative advocating for the bill, highlighted the widespread use of staffing agencies in Western Pennsylvania’s healthcare field. “Many facilities now rely on staffing agencies,” she explained. “These healthcare workers lack support, training, and oversight and often work excessive overtime hours, leading to deteriorated patient care and overall dysfunction within healthcare systems.”

    Related: European Commission Pushes for Compromise on Gig Worker Rights

    In Pittsburgh, companies such as Reliable Home Health and Sunrise Residential Care Services have faced charges for misclassifying workers and failing to pay overtime. A 2023 Economic Policy Institute study found that misclassified workers lose thousands of dollars annually — from an estimated $5,500 for manicurists to over $14,500 for truck drivers.

    Gerhardt also emphasized the financial impact on taxpayers. “These employers are not contributing to our budget, forcing law-abiding businesses to compete against those not adhering to proper practices,” she said.

    The proposed bill aims to redefine the criteria for independent contractors, focusing on whether an employer exerts control over a worker’s tasks or if the business is independently established by the individual. If passed, the gig workers bill would bolster the Pennsylvania Department of Labor and Industry by providing additional investigators and support staff. Currently, only 27 investigators are available to handle labor law violations.

    Moreover, the bill would grant the department the authority to access employer records during investigations and issue administrative stop-work orders against employers found to be deliberately misclassifying workers.

    Source: Wesa