Pennsylvania workers should be aware of being misclassified by their employers. This is a prevalent and harmful act that is done deliberately by employers so that they can reduce costs and shift responsibility. The United States Department of Labor has obtained two judgments against employers who falsely claimed that their workers are independent contractors instead of employees.
The defendant in the cases had required its construction workers to become members of limited liability companies in order the take away the legal rights that come with being employees. The construction workers went from being employees in Utah and Arizona working on the construction of houses to conducting the same work on the very next day and on the same job site without state and federal wage and safety protections.
When the state of Utah prohibited the defendants’ business model, the companies left the state for Arizona, under a new name and same business scheme. The renamed businesses were investigated, and $600,000 was ultimately collected for back wages and damages.
Job misclassification is a pervasive problem in multiple industries in addition to construction. It is made worse by the establishing of employment structures in which work is contracted and subcontracted away from the base company. It prevents workers from earning minimum wage and overtime pay and makes them ineligible for standard social safety net protections, such as unemployment insurance and workers’ compensation. The unpaid payroll taxes on the part of the employers stretches the resources of social programs that already limited funds, such as Medicare and Social Security. Misclassified employees may also be denied the employee benefits to which they would otherwise be entitled. People who have been treated in this type of manner may want to meet with an attorney to see what recourse may be available to them.