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Senate Bill Takes Aim at Workers’ Comp Misclassification

27. November 2013 09:30

Construction workers hammers wood on a sunny day

Senator Bob Casey of Pennsylvania introduced a bill Tuesday looking to put an end to the misclassification of employees as independent contractors – a common occurrence in fields like cable installation, custodial arts, and construction. Some business owners strapped for cash in a rough economy list employees as “independent contractors” in order to avoid paying overtime, taxes, and insurance coverage. As a result, injured employees are forced to pay out of pocket for workplace injuries.

According to Senator Casey, the effects of misclassification are far-reaching. He estimates that payroll theft has taken billions of dollars out of taxpayers’ pockets. If his legislation goes through, employers who misclassify their employees would face penalties. All employers would be required to let workers know their employment status up front.

What does this legislation mean for your small business? Read on to find out.

Industries Affected by the Workers’ Comp Misclassification Bill

While many small businesses depend on actual contract employees, others may not even realize they could face fines and additional taxes for the workers they currently employ. As a general rule of thumb, if you regulate the time and place that your workers must perform their work or how they must do it, you probably have to classify them as employees – and make the associated Workers’ Compensation Insurance and tax payments.

The following industries are among the most likely to be affected by the misclassification bill, according to sources…


Contractors | Janitors & Maids | Small Business Risk Management | Workers' Compensation Insurance

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