“Independent Contractor” and Worker Abuse…
In Pennsylvania there’s a growing epidemic of worker abuse. What’s so demoralizing about this particular abuse is often times the victims, YOU the worker, don’t even know that they have been victimized until after the fact. OR, the worker is aware of the abuse, but feels trapped, and the employer takes full advantage of the situation.
In essence, the employer misclassifies the employee as an “Independent Contractor”. Why does the employer do this? To avoid the typical overhead associated with running a legitimate business. When misclassifying an employee as an Independent Contractor the employer illegally dodges FICA contributions, paying Federal, State, and Local taxes. In addition the worker loses Overtime Compensation, the access to Unemployment Compensation and in the event of a job place injury, Workers Compensation.
The employer is cheating other legitimate businesses and is in effect “bid rigging”. Also the employer cheats every citizen who depends on Social Security payments by illegally avoiding contributing to the fund. In the end, the worker, and their family lose out the most. The worker absorbs the employer’s tax burden, loses out on precious Social Security contributions, and jeopardizes his/her family in the event of job loss or injury.
A very conservative study performed by Pennsylvania Labor & Industry in 2008 estimated that 9% of Pennsylvania’s labor force are misclassified as an “Independent Contractor”. The cost to the State is staggering. $200 million dollars unpaid to the Unemployment Compensation Fund, and another $81 million dollars lost in Workers Compensation. Not to mention, hundreds of millions of dollars unpaid in State and Local taxes. At a time when education is being slashed, public services being de-funded, and unemployment compensation reduced, the effects of this fraud are visible all around us and to everyone who call Pennsylvania home.
If you’re unsure of your status the State has a set of criteria one must meet in order to be legally considered an “Independent Contractor” in the Construction Industry.
If you answer no, to one or more of the following questions you are probably not an Independent Contractor, and could possibly be entitled to loss wages, unemployment compensation, and workers compensation. Please, if you have any questions or concerns, feel free to reach out to us.
- You have a written contract with the business or the person with whom you work for.
- You control or direct your own work.
- You posses the tools and equipment needed to perform the work.
- You are an owner or a partner in a business that you own.
- Your arrangement with the business or the person for whom you work for allows you to earn a profit or suffer a loss as a result of the work you perform.
- Your business location is separate from the business or person for whom you performed construction work for.
- You’ve previously worked as a subcontractor and hold yourself out to the public as an Independent Contractor.
- You had/have liability insurance of at least $50,000.