"Jail 'Em" Says Pennsylvania Senator About Employers Who Misclassify

I've written here recently about the one-sided Criminalization of Employment Law. It seems that employees are getting tossed in jail while scofflaw employers sail off in their yachts laughing at the 99%. Well, at least one state Senator is doing something to balance things out.

Senator Mike Stack has proposed a bill in Pennsylvania to toss employers who misclassify employees in jail. Employers who declare employees to be independent contractors are illegally avoiding paying worker's compensation premiums, overtime and employment taxes, and at least Senator Stack is doing something about it.

Pennsylvania already has a law, as do many other states, providing civil penalties to employers who misclassify, but it isn't working. Employers are wiping their collective you-know-whats with this law and the Fair Labor Standards Act. Some states have cut deals with the Department of Labor to help enforce these laws. However, Pennsylvania reports that only 1/3 of pending cases have been resolved.

This new proposed law will allow prosecutors to step in and press criminal charges against recalcitrant employers. Stack said this about the need for the law: “Pennsylvania’s record of enforcement is a disservice not only to working families, but also to every taxpayer in the state. Federal officials understand that misclassification of workers means payroll taxes are not withheld, resulting in reduced tax collections. Everyone pays while a few benefit.”

While some state and local governments have passed wage theft laws cracking down on nonpayment of wages, wage theft remains rampant. Some municipalities have tried to deny licenses to thieving employers. Some states are finally passing laws that allow prosecution of wage thieves, but they're a small minority. There have been some prosecutions, but employers landing in jail are few compared with employees being prosecuted for trade secrets, eating cookies, blowing the whistle, and being disloyal.

This proposed bill in Pennsylvania may help balance the equities. After all, it hurts legitimate businesses, taxpayers and voters to have employers running around evading taxes, injuring employees without having insurance, and not paying wages. Will legislators in other states (yeah, I won't hold my breath in Florida) follow suit? Will we finally start demanding these corporation-persons be held accountable for their misdeeds?

Stay tuned.