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Misclassification: Pennsylvania calculates costs, lawmaker promises action

Pennsylvania lost up to $124.5 million in tax revenue in 2019 due to misclassification of workers as independent contractors, according to a report on the issue submitted earlier this month by the Joint Task Force on Misclassification of Employees. In addition, the unemployment compensation fund loses $131 million annually and workers who suffered injury or illness in 2020 lost $176 million without workers’ compensation coverage.

The task force, which was created by Act 85 of 2020 [1] to study the effects of worker misclassification, submitted its preliminary report [2] to the state General Assembly March 1. The report summarized the effects of misclassification, including:

State Rep. John Galloway, D-Bucks, announced that he is working with colleagues to introduce legislation to address the 15 recommendations made by the task force, according to The Reporter [3].

Among those recommendations are that the General Assembly: