Mayor Kenney Signs Expansion of Prevailing Wage Legislation (PA)

For Immediate Release: October 20, 2016
Published By: Office of the Mayor
Contact: Mike Dunn, (215) 686-6210

(Philadelphia, October 20, 2016) – Declaring it a vital step for thousands who struggle to make ends meet, Mayor Kenney today signed into law a measure that expands the City’s Prevailing Wage Ordinance to include service workers at publicly-subsidized institutions.

“People usually associate the word ‘poverty’ with ‘unemployment,'” said the Mayor. “But the fact is, a good number of Philadelphians who are employed still find themselves struggling in poverty. This measure marks an important step towards assuring that low-wage employees receive a family-sustaining wage.”

Signed into law was Bill #160713, passed unanimously by Philadelphia City Council on October 6. It expands the Prevailing Wage Ordinance to include service workers at universities, hospitals, stadiums, the Convention Center and other publicly-subsided institutions. With the Mayor’s signature, the bill takes effect immediately, and will be applied to future contracts and agreements between the City and such institutions.

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Employers Misclassifying Workers Face Joint Federal/State Investigations

Brian J. Hoffman, The Legal Intelligencer
November 22, 2016

Employers have often played “fast and loose” with regulations governing workforce classification, tempted by the significant savings associated with independent contractor treatment. As such, in August 2016, Pennsylvania became the 35th state to reach an agreement with federal authorities to coordinate inquiries and share enforcement data in wage and hour investigations.

The Pennsylvania Department of Labor and Industry (PA DOL) and the United States Department of Labor (“US DOL”) inked a Memorandum of Understanding which serves to facilitate the exchange of information during enforcement actions. Historically, a particular focus of both the US DOL and PA DOL has been the misclassification of employees as independent contractors. Previously, an investigation by the PA DOL or US DOL of an employer would NOT necessarily lead to a reciprocal investigation by the other party. Now, given the execution of the Memorandum of Understanding, employers should expect that a wage and hour investigation by one department will likely lead to an investigation by the other. As such, employers challenged on employment classification practices while under audit will likely see overall liabilities increase during any given inquiry, as both federal and state taxes and penalties will be imposed.

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Pennsylvania Labor & Industry Kicks Off Misclassified Workers Public Awareness Campaign

Pennsylvania Department of Labor & Industry
Oct 19, 2016, 14:51 ET

HARRISBURG, Pa., Oct. 19, 2016 /PRNewswire-USNewswire/ — Pennsylvania Department of Labor & Industry Secretary Kathy Manderino today kicked off a statewide public awareness campaign about worker misclassification. The campaign was funded by a$473,000 grant from the U.S. Department of Labor.

“Worker misclassification is a nationwide problem that has a negative impact on Pennsylvania’s economy and unemployment compensation fund,” Sec. Manderino said. “It creates an uneven playing field for employers who properly classify their workers.”

Worker misclassification occurs when employers treat certain employees as independent contractors when they should not be classified as such. This may be done to reduce payroll and other costs.

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WHD News Brief: 08/04/2016
Release Number: 16-1603-NAT

Participants: U.S. Department of Labor’s Wage and Hour Division
Pennsylvania Department of Labor & Industry

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the Pennsylvania Department of Labor & Industry signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. The two agencies will provide clear, accurate and easy-to-access outreach to employers, employees and other stakeholders; share resources; and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law.

Background: The division is working with the U.S. Internal Revenue Service and 31 other U.S. states to combat employee misclassification and to ensure that workers get the wages, benefits and protections to which they are entitled. Labeling employees as something they are not – such as independent contractors – can deny them basic rights such as minimum wage, overtime and other benefits. Misclassification also improperly lowers tax revenues to federal and state governments, as create losses for state unemployment insurance and workers’ compensation funds.

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PA military contractor pleads guilty in $1.4M fraud case

By Kim Slowey
August 18, 2016

Dive Brief:

  • A Pennsylvania contractor has pleaded guilty to fraud and to receiving kickbacks in connection with $1.4 million in losses at two New Jersey military facilities, according to the Times Leader.
  • Prosecutors allege that while managing military construction work, James Conway awarded his own company subcontracts for services that were never performed or only partially completed and concealed the fact that he owned the company by using an alias to sign project paperwork.
  • Authorities also maintain that Conway took more than $180,000 in kickbacks from other subcontractors in exchange for “favorable treatment.” .

Dive Insight:

A U.S. District judge ordered Conway to make full restitution, but he still faces up to $500,000 in fines and a maximum prison sentence of 30 years.

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Subcontractor charged with dumping pollutants into Susquehanna River, cheating workers

By Hope Stephan
on July 28, 2016 at 10:28 AM

A subcontractor hired for rehabilitation work on the George Wade Bridge in 2009 has been charged with embezzling $400,000 from union benefit and workers’ pension plans related to the work and with dumping pollutants into the river during the project.

Andrew Manganas, 59, and Panthera Painting of Canonsburg were indicted by a federal grand jury in Harrisburg on charges of embezzlement, fraud, false statements and environmental charges under the Clean Water Act related to to overall $42 million project on the bridge that carries Interstate 81 over the Susquehanna River between Cumberland and Dauphin counties.

Panthera was subcontracted for $9,875,000 worth of that work, to blast, resurface and paint the structural steel of the bridge.

Federal oversight required each contractor and subcontractor to submit certified payroll reports for every worker and pay period to certify the federal prevailing wage was being paid.

Manganas and Panthera are accused of engaging in a “side payroll” scheme, U.S. Attorney Peter J. Smith said in a press release. Workers received two checks – one for regular hours and a separate “per diem” check. The “per diem” check was for overtime hours worked and did not include required contributions to the workers’ union welfare benefit and individual employees’ pension plans.

The total taken through the scheme, Smith said, came to $400,000 between 2011 and 2013.

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Legislation Would Go After Employers Who Misclassify Workers to Avoid Benefits

A state lawmaker says Pennsylvania regulators are coming up short when it comes to enforcing a 2010 state law intended to target companies that misclassify their workers as independent contractors.

State Senator Mike Stack (D-Philadelphia) said there is room in the economy for independent contractors, but, “there is obvious abuse of the classification which denies employees rights, benefits and protections accorded under labor laws.”

Under Act 72, independent contractors are supposed to use their own tools and equipment and should not be under the direct supervision of their employers.

The law outlines penalties for misclassifying workers, but Stack said the commonwealth is not adequately enforcing the law

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PHA Launches Improved Pre-Apprenticeship Program for Residents

Graduates will become full-time PHA employees

Philadelphia, PA – August 13, 2013 – (RealEstateRama) – The Philadelphia Housing Authority (PHA) has launched a revamped Pre-Apprenticeship Program for its residents. This comprehensive job training course teaches participants skills in maintenance and repairs. Upon completion of the program, graduates will become full-time PHA employees.

PHA’s President & CEO Kelvin A. Jeremiah, who committed to having PHA residents make up 25 percent of the agency’s workforce, called the relaunch a major step forward, and a great effort to better position PHA residents for sustainable employment.

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