In this day in age, according to Rep. John Galloway (D-Bucks), it’s “extremely rare” for Democrats and Republicans to find common ground on an issue. But that’s exactly what happened recently when the House of Representatives unanimously passed House Bill 716.
The bill, introduced by Galloway and Rep. Perry Warren (D-Bucks), works to combat the misclassification of workers as “independent contractors,” calling for the formation of a task force to examine the issue and make recommendations on how to fix it. The task force would be required to file an annual report to the General Assembly.
During a news conference on Wednesday, Sept. 4, at Galloway’s office, 8610 New Falls Road in Levittown, he and Warren, along with union worker Kevin Morrow, Bryan Allen (office of Rep. Tina Davis) and Amy Masgay (office of Sen. Steve Santarsiero), explained the importance of the bill, which they hope will be passed by the Senate in the near future.
The creation of H.B. 716 began almost five years ago when Morrow, who has worked in construction for 20 years, approached Galloway about the growing industry problem of misclassification – when an employer classifies its employees as working for outside entities.
“This is done deliberately to cut labor costs, pay less in taxes and avoid paying our working class a fair compensation,” Galloway said. “This is a practice that hurts the workers who are entitled to the benefits they’ve rightfully earned, their families that they work hard to provide for, and our economy.”
Though a bill was passed seven years ago that made misclassification illegal, Morrow told Galloway about the massive loopholes in the legislation.
“A whole cottage industry has emerged to teach people how to break laws and misclassify workers as ‘independent contractors.’ By taking advantage of loopholes, employers deliberately cut labor costs, pay fewer tax dollars and avoid paying our working people a fair day’s wage for a fair day’s work,” Galloway said.
The task force proposed in H.B. 716 would investigate the practice of employee misclassification and develop a plan to reduce it. It would also determine the amount of money lost annually to the General Fund, Workmen’s Compensation Administration Fund and Unemployment Compensation Trust Fund, which Galloway said equates to more than $200 million.
“What we’re talking about is money. More than anything else, this is a revenue bill. We’re talking about recouping hundreds of millions of dollars lost every single year,” he said.
Galloway also introduced H.B. 715, which would tighten the definition of what constitutes an “independent contractor.”
“We’re not rewriting misclassification. We’re not rewriting law. We have a law in the books,” he said. “The problem with the existing law is it has loopholes that people are exploiting. It needs to be enforced better and the penalties need to be stronger.”
Warren echoed Galloway’s sentiment, explaining how not only workers, but all citizens of Pennsylvania, would benefit from H.B. 716. Workers would have all the regular benefits of an employee, and recuperated funds would be utilized for roads, education and other commonwealth necessities.
“This bill is a win-win for employees and employers,” Warren said. “The bill would benefit workers and ensure their safety, and it will also benefit companies who conduct business the right way. Looking at the big picture, the bill would benefit taxpayers and the public, ensuring payroll taxes are paid, and ultimately provide clear guidance to employers looking to classify all of their workers properly.”
On behalf of Rep. Davis, who could not be present, her chief of staff, Allen, expressed support for the bill.
“Guess who picks up the tab when these workers get hurt on the job and end up in an emergency room? It’s not the company. It’s us. It’s these guys who are doing it the right way and paying taxes and working hard every day,” he said. “You know what they’re doing with the savings that they got? They’re not giving it back to the commonwealth. They’re putting it right back in their pocket.” ••
Samantha Bambino can be reached at email@example.com