The Pennsylvania Department of Labor & Industry will be embarking on a campaign to educate businesses about employee misclassification. The campaign is being funded by a $473,000 grant.
“Worker misclassification is a nationwide problem that has a negative impact on Pennsylvania’s economy and unemployment compensation fund,” Sec. Manderino said. “It creates an uneven playing field for employers who properly classify their workers.”
“Incorrectly classifying a worker as an independent contractor causes harm to the worker by withholding rights that belong to legitimate employees,” Manderino said. “Our goal for this campaign is to educate workers and employers about the important differences between an employee and a contractor.”
Although the above statement mentions Unemployment Compensation, it is just as big of an issue, if not bigger, in Workers Compensation. The stakes are much higher, because many times these workers suffer devastating injuries on the job. In Pennsylvania, if an employer does not have workers compensation insurance coverage, and an employee is injured, the employee can file a claim through the Uninsured Employers’ Guaranty Fund (UEGF). Problem here is, the UEGF is extremely limited in funding and many times exhaust new year funds by February or March.
Many times, it is not that the employer is purposely not carrying workers compensation coverage, it is a real misunderstanding of the definition of an employee and an independent contractor. That misinterpretation can be financially devastating for an employer as well. The employer will likely be liable for lost wages, all medical bills, legal fees for the injured employee, the UEGF, and their own attorney. The Construction Workplace Misclassification Act also provides for misdemeanor offenses against the individual employer, which can include jail time. The misinterpretation can wreak havoc on an individuals retirement and finances.
Often times, I’ve heard individual employers testify that the injured individual is a contractor because they pay them with a 1099 form. That is not even a close factor. and completely dangerous for an employer to rely on that fact. It is much more complicated and complex than paying an individual with a 1099 form.
Mooney & Associates can help employers wade through this complex situation and protect themselves from getting into these situations. Our business attorneys can meet with you and set you on the path of protection. I primarily represent injured workers. I have practiced with UEGF claims often, representing injured workers and representing uninsured employers.
If you are na injured employee in an uninsured situation or an employer needing legal counsel because of a work injury, you can call Mooney & Associates at 717-200-HURT or 1-877-632-4656. We have offices through Central Pennsylvania.