04/14/2008
A public hearing is scheduled for April 23 in Delaware County on state legislation that essentially would eliminate independent contractor status in Pennsylvania.
House Bill 2400, sponsored by state Rep. Bryan Lentz (Delaware), has lasting negative implications for a host of Pennsylvania industries including farmers, truckers, manufacturers, retailers, insurers, restaurants, commercial and residential home construction contractors, home-improvement contractors, financial services and home-based direct sellers. The legislation even could affect roadside auto service offered by motor clubs like AAA.
The legislation falsely assumes everyone is an employee and then requires the employer to prove otherwise. Employers convicted of "unintentionally" violating the law would be subject to six months in jail and a $2,500 fine for the first offense. Those employers who are convicted of intentionally violating the law would be convicted of a third-class felony, subject to up to 3.5 years in prison and a $15,000 fine for the first offense. The state Labor Department also can close a business for two years and prevent it from competing for state contracts. The bill also gives employees and third parties the right to file lawsuits against employers found guilty under the act.
While the bill seeks to punish employers who intentionally misclassify workers to avoid paying taxes, unemployment compensation or workers' compensation, the unintended consequence is that it also will force law-abiding small business owners into the courtroom to prove their relationships with legitimate independent contractors still are appropriate.
The bill makes it virtually impossible for a small business owner to prove that an individual is independent because it fails to define critical terms like "control." Without a definition, the term ultimately will be defined by state bureaucrats or the courts. That means small business owners will be forced to spend hours with lawyers and judges instead of working to run and grow their businesses.
The bill already is scheduled for a vote Tuesday, May 6, in the state House Labor Committee.
Don't delay! Contact your elected official today to warn them of the costly effect this legislation would have on your business.
NFIB has made it fast and easy for you to communicate your message to your elected officials. Please feel free to personalize it and be sure to include information about your business and how this issue may uniquely impact you. If you need assistance, please contact us at NFIB/Pennsylvania at 717-232-8582.
