Pennsylvania Department of Labor & Industry’s Joint Task Force on Misclassification of Employees Concludes Tenth Meeting

On October 28th, 2022, the Pennsylvania Department of Labor & Industry’s Joint Task Force on Misclassification of Employees (“Joint Task Force”) held its tenth meeting of the year. The Joint Task Force was created when Pennsylvania Governor Tom Wolf signed Act 85 into law in October 2020, which called for the creation of a Joint Task Force to be composed of seven members (or their designees) and chaired by the Secretary of Labor & Industry. The Joint Task Force is charged with evaluating the status of worker misclassification in Pennsylvania and developing recommendations to present to the Pennsylvania General Assembly. Since its first meeting in January 2021, the Joint Task Force has considered many comments and presentations from interested parties representing workers, employers, and enforcement entities.

The October 2022 meeting focused on discussing the draft of the Joint Task Force’s final report. The report includes an overview of the Joint Task Force, an executive summary of the work they performed, a discussion of the need for collaboration between workers and businesses and actions that both workers and employers can take, a breakdown of estimated costs of misclassification, and appendices that include legislative ideas & amendments. This report will be presented to the General Assembly.

The committee is currently chaired by Deputy Secretary for Safety and Labor-Management Relations, Basil Merenda, who is the designee of Secretary of Labor & Industry Jennifer Berrier. Ms. Berrier attended the October 2022 meeting and commented on how, for the first time in Pennsylvania history, the Joint Task Force and the General Assembly are taking a deep dive into understanding worker misclassification, which is long overdue and much needed. Ms. Berrier hopes the final report will make Pennsylvania a better place to work, both by protecting workers and ensuring a level playing field.

Throughout the meeting, the committee debated how to balance securing worker protections with ensuring legislative action and employer take-up. One issue that immediately arose was the inclusion of hospitality, construction, and agricultural workers in the Joint Task Force’s classification recommendations, and one committee member proposed removing agricultural workers because they are too distinct. The committee was generally of the belief that the legislature should and could figure out another way to classify agricultural workers, so they were ultimately taken out of the Joint Task Force’s recommendation.

Another important issue was whether to recommend the ABC test. Under the ABC test, a worker is assumed to be an employee, and the burden of proving they are an independent contractor is on the employer. The test includes three inquiries to determine employee status, and it does not apply to all occupations. There is much debate surrounding whether the ABC test is the best way to determine the independent contractor-employee distinction, and some Joint Task Force members claimed Pennsylvania needs a more customized process. These members argued that recommending the ABC test will garner resistance, especially due to its use in more liberal states like California and New Jersey, and that the final recommendation should be more palatable to the General Assembly.

Joint Task Force member Lance Claiborne, Director of the General Business Contractors Association, commented on how some construction workers have been negatively impacted by the perception of the ABC test. On the other hand, member Drew Simpson, Regional Manager of Carpenters Union Local 445, claimed there is no need to create a new system when the ABC test has proven to be effective.

After deliberations, the Joint Task Force decided to have members spend one more week reviewing the draft and noting any specific provisional, linguistic, or stylistic changes, and then use those edits as a starting point for the next meeting. There were no public comments after the meeting.

The Joint Task Force will hold its next public meeting on November 18, 2022, and plans to ratify the final report by that date. More information about the Joint Task Force, the worker misclassification proposal, and future meetings is available here. Updates will be posted to this blog as the matter progresses.

The legal team at Miller Shah LLP has extensive experience representing worker misclassification matters. If you have any questions regarding this subject or this post, please contact Chiharu Sekino (cgsekino@millershah.com). The Firm can also be reached toll-free at (866) 540-5505.