The owner of a Pennsylvania construction firm pleaded guilty to theft and related charges in what appears to be the first criminal case tried under a decade-old law aimed at cracking down on worker misclassification, the Delaware County Daily Times reported [1].
Armando Garcia-Ramirez, owner of York-based G&R Drywall and Framing LLC, was charged with his wife and business partner Martha Guzman, their daughter and employee Stephanie Garcia Rivera, and Angelita Paulin-Santos, in what county District Attorney Jack Stollsteimer said last month appeared to be the first actual use of Act 72 of 2011 [2], or the Construction Workers Misclassification Act.
Under Act 72 [2], no individual may be classified as an independent contractor unless the individual:
A. Has a written contract to perform construction services with the business or person;
B. Is free from control or direction over the performance of these services; and
C. Is customarily engaged in an independently established trade, occupation, profession or business.
A company or its officer or agent may be subject to penalties if the business fails to properly classify an individual as an employee under the Pennsylvania Workers’ Compensation Act or the Unemployment Compensation Law or fails to provide workers’ compensation coverage or make unemployment compensation contributions on behalf of an individual who should be classified as an “employee” under those laws.
Each individual misclassification by an employer is a separate violation of the law and constitutes grounds for separate penalties. The department may also refer intentional or negligent violations to the Attorney General for criminal prosecution. An intentional violation is a criminal misdemeanor and a negligent misclassification is a criminal summary offense.
Assistant District Attorney Elizabeth Schneider said Garcia-Ramirez intentionally misclassified more than 30 workers who did not meet the definition of independent contractors under Act 72 in order to avoid paying taxes on their wages, the Delaware County Daily Times reported.
Garcia-Ramirez pleaded guilty to theft by unlawful taking and conspiracy to workers’ compensation fraud, both felonies of the third degree, as well as improper classification of workers, a third-degree misdemeanor, the paper reported. He was sentenced to time served to 23 months with one year of consecutive probation.
Guzman, Rivera and Paulin-Santos are all scheduled for a preliminary hearing before Judge Anthony Scanlon on March 8.