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Pennsylvania Department of Labor & Industry’s Joint Task Force on Misclassification of Employees Concludes Ninth Meeting

On September 23, 2022, the Pennsylvania Department of Labor & Industry’s Joint Task Force on Misclassification of Employees (“Joint Task Force”) held its ninth meeting of the year. The Joint Task Force, comprised of seven bipartisan members and their designees, was created in October 2020 as a result of Act 85 (House Bill 716) to evaluate the status of worker misclassification in Pennsylvania and develop recommendations to present to the Pennsylvania General Assembly. Since its first assembly in January 2021, the Joint Task Force has heard many comments and presentations from interested parties representing workers, employers, and enforcement entities.

The National Federation of Independent Business (“NFIB”) presented at the Joint Task Force’s September 2022 meeting. The NFIB is a national nonprofit and nonpartisan advocacy association that represents small and independent business owners. The NFIB’s Pennsylvania branch advocates for approximately 13,000 member businesses that each have an average of ten employees. According to the NFIB, 95% of its Pennsylvania members believe small independent businesses should be permitted to hire independent contractors to perform work essential to their businesses.

NFIB’s Pennsylvania State Director, Gregory Moreland, expressed that the Pennsylvania NFIB and its member businesses will not support the Joint Task Force’s final proposal to the General Assembly if it recommends adopting the ABC Test. Additionally, Moreland communicated the NFIB’s disagreement with the Joint Task Force’s emphasis on regulating, fining, and punishing employers who misclassify their employees as independent contractors. Finally, Moreland explained the NFIB is concerned that the proposal will impose greater regulation and government control and disproportionately affect small businesses.

In response to the NFIB’s asserted dislike of the ABC test, Deputy Secretary for Taxation Bryan Barbin asked Moreland to provide an alternative standardized guideline for differentiating employees from independent contractors, as well as alternative standardized measures for enforcing the laws and preventing employers from misclassifying employees as independent contractors.

Moreland admitted that the Pennsylvania NFIB currently does not have specific recommendations for an alternative standard. However, he urged the Joint Task Force to survey the guidelines on worker misclassification recently established in Montana, which scrutinize the employer’s intent and, according to Moreland, would more appropriately target big businesses that maliciously misclassify employees as independent contractors rather than target small business owners who have limited knowledge of worker misclassification laws. Furthermore, Moreland highlighted that the proposal should promote education, training, collaboration, and remedial action for small businesses instead of focusing on punishment, or, at the very least, include first offense exceptions for small businesses.

The Joint Task Force will hold its next meeting on October 28, 2022, and plans to consider and ratify the final report by that date. Updates will be posted to this blog as the matter progresses.

The legal team at Miller Shah LLP has extensive experience representing worker misclassification matters. If you have any questions regarding this subject or this post, please contact Chiharu Sekino (cgsekino@millershah.com) or Shuping Li (sli@millershah.com). The Firm can also be reached toll-free at (866) 540-5505.

Miller Shah LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of International Advisory Group (IAG Global), which provides clients access to excellent legal and accounting resources across the globe. For more information about the firm, please visit Miller Shah LLP.

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