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Task Force Makes 15 Recommendations to Combat Employee Misclassification (PA)

Posted by National Alliance for Fair Contracting on

December 4, 2022 – by MyChesCo

PENNSYLVANIA — Pennsylvania Department of Labor & Industry (L&I) Secretary Jennifer Berrier on Thursday announced that the Joint Task Force on Misclassification of Employees, a bipartisan-nominated group of volunteers representing business, labor, and government perspectives, has submitted its final report to the General Assembly with 15 unanimous recommendations.

The Joint Task Force was created by Act 85 of 2020 to study the misclassification of workers and its impact on the Commonwealth. Misclassification of employees occurs when a business wrongfully classifies a worker as an independent contractor when the nature, type, and oversight of their work determines they should be considered an employee under the law.

“Misclassification harms everyone except the lawbreakers. Misclassified workers are denied the protections and benefits to which the nature of their work entitles them. Law-abiding businesses lose out on business and contracts to unscrupulous businesses engaged in knowing and rampant misclassification. Taxpayers suffer because misclassification deprives the Unemployment Compensation Trust Fund and General Fund of revenue, which results in higher tax rates for everyone,” Berrier said. “I urge the General Assembly to act on the Joint Task Force’s recommendations to address this glaring problem.”

The Joint Task Force report estimates:

  • 48,939 employers in Pennsylvania currently misclassify at least one employee annually;
  • 259,000 Pennsylvania workers are misclassified annually;
  • $91 million in annual lost revenue to the UC Trust Fund due to misclassification;
  • Between $6.4 and $124.5 million in lost revenue in 2019 to the General Fund due to misclassification;
  • $383 thousand in estimated losses to the Uninsured Employer Guaranty Fund (UEGF) due to misclassification in 2021;
  • 10,892 misclassified employees who suffered injury or illness at work and were denied Workers’ Compensation in 2021;
  • $153 million in estimated losses to misclassified employees who suffered injury or illness at work in 2021 without workers’ compensation insurance.

The Joint Task Force has held monthly meetings since January 2021 to study misclassification and will continue to meet through December 2022, when its authority under Act 85 expires. In addition to members appointed by the four caucuses in the General Assembly, the representatives from the Office of the Attorney General and the departments of Revenue and Labor & Industry also serve on the seven-member task force.

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Austin City Council passes wage theft protection ordinance

Posted by National Alliance for Fair Contracting on

Author: KVUE Staff
Published: December 2, 2022

The ordinance includes three elements that aim to protect workers and help them get full payment for the work that they do.

AUSTIN, Texas — On Thursday, the Austin City Council voted on a way to protect laborers.

The council unanimously passed an ordinance that it says will help prevent wage theft.

According to the Workers Defense Project, the ordinance will create a wage theft coordinator position to assist workers that come forward with reports of wage theft violations. The council said this will help make sure workers get full payment for the work that they do.

The ordinance will also create a publicly available database of employers that have a record of wage theft doing business with the City of Austin. It will also bar any employer identified in the database from entering into contracts with the City.

The Austin Monitor reports that the City does not have the authority to prosecute wage theft violators. That responsibility lies with the state and local governments.

Employers who are proven to have committed wage theft can be fined and even sentenced to jail time.

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Treasury, IRS Release Guidance on Wage and Apprenticeship Requirements, Commenced Construction Standard

Posted by National Alliance for Fair Contracting on

JD Supra | December 5, 2022

On Nov. 29, the Treasury Department (Treasury) and the Internal Revenue Service (IRS) published Notice 2022-61, Prevailing Wage and Apprenticeship Initial Guidance under Section 45(b)(6)(B)(ii) and Other Substantially Similar Provisions (Notice). The Notice provides initial guidance on the prevailing wage and apprenticeship requirements taxpayers must satisfy to qualify for increased energy credits or deduction amounts enacted in the Inflation Reduction Act (IRA) (P.L. 117-169).

The prevailing wage and apprenticeship requirements apply to the following tax incentives:

  • Advanced Energy Project Credit (§ 48C)
  • Alternative Fuel Refueling Property Credit (§ 30C)
  • Credit for Carbon Oxide Sequestration (§ 45Q)
  • Clean Fuel Production Credit (§ 45Z)
  • Credit for Production of Clean Hydrogen (§ 45V)
  • Renewable Energy Production Tax Credit (§ 45, § 45Y)
  • Renewable Energy Investment Tax Credit (§ 48, § 48E)
  • Energy Efficient Commercial Buildings Deduction (§ 179D)

The prevailing wage requirements also apply to the following tax incentives:

  • New Energy Efficient Home Credit (§ 45L)
  • Zero-Emission Nuclear Power Production Credit (§ 45U)

Under the statute, prevailing wage and apprenticeship requirements apply to qualifying facilities that begin construction 60 days or more after the Treasury and IRS publish guidance. This Notice starts the clock on the statutory 60-day period, meaning the requirements will be in effect for facilities that begin construction on or after Jan. 29, 2023. For facilities the construction of which begins prior to that date, the increased credit amount applies without regard to these labor requirements.

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Employers short Iowa workers $900 million annually, report says

Posted by National Alliance for Fair Contracting on

Erin Murphy | The Gazette
Nov. 25, 2022

Iowa Workforce Development says it works hard to ensure employees are paid fairly

DES MOINES — Iowa workers are not paid an estimated $900 million owed to them annually, affecting one in seven workers in the state, and state oversight agencies are doing little to enforce violations, according to a report from a liberal-leaning issue advocacy group.

The report is from Common Good Iowa, which describes itself as a nonpartisan, not-for-profit organization. The group is staffed by policy advocates and researchers, and advocates for “people-centered policy solutions for our state’s most pressing issues.”

According to the report, 250,000 Iowa workers are not paid $900 million owed to them annually:

  • $501 million in overtime violations
  • $241 million in minimum wage violations
  • $163 million in other violations, including the forced sharing of tips, forcing people to work off the clock, making illegal deductions from paychecks or mis-classifying employees as contractors.

The report was written for Common Good Iowa by Sean Finn, whose focus for the group is on labor standards and practices.

Finn analyzed data from the federal Bureau of Labor Statistics and Iowa Workforce Development, and U.S. Department of Labor enforcement records.

“This insidious and growing problem costs Iowans 10 times more than all other forms of theft combined,” Finn said in a news release.

According to the report, in addition to those unpaid wages, state and federal government agencies are doing little to punish businesses for any violations. For every $1,000 in wage theft, only $2 is recovered by government agencies — less than 1 percent — the report says.

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City Council bans Cleveland from doing business with companies that practice wage theft

Posted by National Alliance for Fair Contracting on

Published: Dec. 05, 2022 | Cleveland.com

By Courtney Astolfi

CLEVELAND, Ohio – Cleveland City Council approved on Monday an ordinance banning the city of Cleveland from doing business with companies found to practice wage theft and those that commit payroll fraud.

The new law bars Cleveland from granting financial assistance to such companies or entering into contracts with them for city services or construction.

The measure is a victory for advocacy group Guardians for Fair Work, which has been lobbying city officials this year to deliver wage-theft protections for Cleveland workers.

“This is an important step forward for working people in Cleveland. We believe the only way we succeed as a city and region is to put workers at the center of our economic development strategies. Without this worker centered approach we will not have shared prosperity,” organizer Nora Kelley said in a news release. She added that workers with the lowest wages are often the ones victimized by wage theft.

Businesses seeking city contracts or financial assistance will have to report to the city’s Fair Employment Wage Board any instances of a government agency finding that they or a subcontractor committed wage theft or payroll fraud within the last three years. Businesses that self-report those instances would not be eligible to receive city money or contracts.

FY 2023 Davis-Bacon Act Wage Survey Plan

Posted by National Alliance for Fair Contracting on

Davis-Bacon Act Wage Survey Plan

The U.S. Department of Labor’s Wage and Hour Division will be asking the highway, heavy and building construction industries to participate in Davis-Bacon Act wage surveys in FY 2023 to help the agency establish prevailing wage rates, as required under the Davis-Bacon and Related Acts (DBRA).

The DBRA directs the department to set the prevailing wage rates that reflect the actual wages and fringe benefits paid to construction workers in the local area where the work is performed.

The survey plan for FY 2023 includes active construction project wage data in the following areas and is not limited to federally funded construction projects. Data collection periods are to be determined and posted online. The Wage and Hour Division strongly encourages all stakeholders to participate in these surveys.

State Construction Type Area
North Carolina Highway Statewide
Arizona Highway Statewide
Arizona Heavy Statewide
New Hampshire Building Statewide
Texas Building Metropolitan Counties: Greater San Antonio and Greater Austin
Guam All Types All Areas

Full participation by contractors and interested parties is key to setting accurate prevailing wages and developing complete wage determinations. Accurate wages and complete determinations also reduce the need for contractors to request additional labor classifications.

The best way to participate in the survey is online. The Wage and Hour Division will send notification letters to interested parties and contractors known to the agency. To be included, please submit all data by the survey-specific cutoff date. Contractors and other interested parties do not need to have received a letter to participate in the survey.

Visit our website to learn more about Davis-Bacon and Related Acts and WHD’s Davis-Bacon survey program.