Bill addresses misclassification to avoid paying workers’ comp
Employee misclassification is an all-too-common problem, despite laws against it and penalties for businesses determined to be guilty of it. It involves classifying a person who meets the legal requirements of an employee as an independent contractor. Pennsylvania clearly defines the difference between employees and independent contractors.
Sometimes, employers misclassify people in error. Other times, it’s intentional – generally to avoid providing employees the benefits to which they’re legally entitled. One of these benefits is workers’ compensation.
Potential penalties for employers
Now, Pennsylvania state lawmakers have introduced a bill that would penalize employers both administratively and criminally if they misclassify workers to avoid paying workers’ comp benefits. Specifically, employers could face:
- Stop-work orders
- Anywhere from a first-degree misdemeanor to a third-degree felony charge, depending on whether it’s a first-time or subsequent offense
- A fine of up to $1,000
Further, any employee who has suffered retaliation, including threats, or fired because they spoke up about being misclassified as an independent contractor would be able to file a lawsuit against their employer.
What if the employer acted in “good faith?”
In some cases, as noted, employers don’t intentionally misclassify employees. That’s why the bill notes that employers can argue that they had a “good faith” belief that someone was an independent contractor rather than an employee.
The bill has a ways to go before it gets to the governor’s desk for signature (if it does). In the meantime, it’s crucial to make sure that you aren’t denied the workers’ compensation benefits to which you’re entitled — whether the denial is because of misclassification or some other reason. To learn about the law and protect your rights, it’s wise to seek experienced legal guidance.