Pennsylvania enacts law, penalties to crack down on misclassification

Pennsylvania has joined the ranks of states targeting employers that misclassify employees to avoid paying workers' comp and other benefits and taxes.

The Construction Workplace Misclassification Act took effect last month and carries stiff penalties for violations.

Civil penalties of up to $1,000 for the first violation and up to $2,500 for each subsequent violation may be assessed by the Department of Labor and Industry. Additionally, a stop-work order may be sought.

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Violations of stop-work orders constitute grounds for additional fines of $1,000 per day. Negligent violations may be referred to the state attorney general for criminal prosecution.

Proponents said the measure would now be able to capture millions of dollars in tax revenue when employers don't pay into the workers' comp system or payroll and unemployment taxes.

Read more at the WorkersComp Forum homepage.

March 3, 2011

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