Capitol Beat
Josh Shapiro says he’s cracking down on wage theft, worker misclassification
The governor and New Jersey Gov. Phil Murphy are readying a task force to fix what they say is a big problem.
Pennsylvania Gov. Josh Shapiro and New Jersey Governor Phil Murphy tour the International Union of Painters and Allied Trades (IUPAT) District Council 21 training facility in Philadelphia. Commonwealth Media Services
Gov. Josh Shapiro said Thursday that his administration will be joining forces with New Jersey officials to crack down on wage theft and worker misclassification in both states.
The collaborative approach will take the form of a new task force, which will be made up of members selected by Pennsylvania Acting Secretary of Labor & Industry Nancy Walker and New Jersey Department of Labor and Workforce Development Commissioner Robert Asaro-Angelo.
Shapiro said that when workers get misclassified as independent contractors, it can result not only in lost wages, but also in lost tax revenue.
“Employee misclassification – it's a big deal, not just to those who get ripped off, but to every community they live in,” Shapiro said. “When a worker gets misclassified, the proper taxes don't get collected, the proper wages don't get paid. You know who gets short changed? Our local police, our local parks – they don't get the revenues that they deserve, and then the commonwealth has to come up with the difference.”
Both the New Jersey Department of Labor and the Pennsylvania Department of Labor & Industry will also be tasked with sharing data and case information that can help with the enforcement of labor violations, and will also be in charge of developing strategies to prevent wage theft and worker misclassification.
The Department of Labor & Industry defines misclassification as a “nationwide problem” that occurs when employees are improperly classified as independent contractors by their employers. This can result in a reduction in payroll and other added costs.
According to data from L&I, there are approximately 389,000 workers in the state who are misclassified annually.
Shapiro highlighted an investigation into Glenn O. Hawbaker while he was attorney general, which led to the company paying more than $20 million in stolen wages to more than 1,000 workers in Pennsylvania.
Labor unions throughout Pennsylvania have previously sought to raise awareness about wage theft and classification.
“It's not just the workers that get screwed, it's a whole food chain of folks who get screwed,” Murphy said. “We're here to say: ‘Enough. No more.’”
The directive establishing the task force can be read below.
April 13 Letter from Pennsylvania Gov. Josh Shapiro and New Jersey Gov. Phil Murphy by City & State PA on Scribd