The Pennsylvania House Labor and Industry Committee recently held a public hearing on the Construction Workplace Misclassification Act (Act 72) and a package of bills that aim to strengthen the Act. Carmen Witmer of J.D. Witmer Drywall, Inc. in Dover, PA was invited to testify on behalf of the Pennsylvania Builders Association.
The purpose of the hearing was to discuss misclassification of employees and legislation that would address the issue, according to Committee Chairman Jim Cox (R-Berks). Chairman Cox stated, We have several proposals in the committee. We have a number of stakeholders here today and want to hear how those proposals impact them.
According to Jennifer Barrier, Deputy Secretary for Safety and Labor Management Relations at Labor and Industry, Measuring from 2015, the department has fined over 700 contractors and collected over $1.6million in penalties. In 2018, L&I collected nearly $567,000 in fines from more than 200 contractors, a 57 percent uptick from the previous year.
Much of the perspective provided by the bill sponsors and stakeholders representing the PA Department of Labor and Industry, labor unions and others, focused on increasing penalties for violators of misclassification. Examples provided demonstrated that often the intentional and repeat violators are large, commercial contractors that are not deterred by fines.
Speaking on behalf of the Pennsylvania Builders Association, Carmen Witmer, J.D. Witmer Drywall, shared her family businesss experience of being audited twice under Act 72. “In the Department of Labor and Industry’s annual report dated March 1, 2019, it doesn’t make sense why J.D. Witmer Drywall is being assessed fines in excess of $13,000, yet the largest drywall outfit in our area is only asked to pay in $1,000. It is obvious that there are inconsistencies within the auditing process,” she stated. “We specifically question what gives the department the authority to tell us that another business entity is our employee when we’ve given proof that says otherwise. The other sub-contractors would be nothing short of offended and insulted if you told them that they were employees of J.D. Witmer Drywall.”
Following the testimony, Chairman Cox noted, We have to be more common sense about our approach because we are impacting businesses on a major scale,” he stated. “We have to figure out a way to tighten things up. We pass laws to be enforced obviously, but the goal should never be to catch unwary citizens and businesses in a trap.”
We have been working with the Witmers (J.D. Witmer Drywall, Inc. is a York Builders Association member company) to ensure that their side of the story is heard. Were grateful that we can make sure our members who are primarily small to medium-sized residential contractors – have a voice in Harrisburg, thanks to our team at the Pennsylvania Builders Association, said Laurie Lourie, Executive Vice President of the York Builders Association. Legislation that targets large, unscrupulous, often out-of-state commercial contractors, also impacts our hard-working local residential builders and remodelers. Small, legitimate contractors in PA deserve to have a level playing field.
Following the hearing, Carmen Witmer commented, Following two audits from the Dept. of Labor and Industry that were handled unfairly, we were finally able to get our story out and into the right spotlight. After sharing with many people what Jareds business, and our family, has been through since 2012, we are so thankful that Laurie Lourie from the York Builders Association, and Sarah Miller and Jill Pento from the Pennsylvania Builders Association saw the urgency to make our story known, and today we were able to do that. We hope that this encourages other small contractors to share their stories. Legislation should not negatively impact the success of a small business that is making every effort to do the right thing.
