COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
LABOR AND INDUSTRY COMMITTEE PUBLIC HEARING
STATE CAPITOL HARRISBURG, PA
MAIN CAPITOL BUILDING ROOM B-31
MONDAY, JUNE 3, 2 019 11:04 A.M.
PRESENTATION ON CONSTRUCTION WORKPLACE MISCLASSIFICATION
BEFORE: HONORABLE JIM COX, MAJORITY CHAIRMAN HONORABLE CRIS DUSH HONORABLE TORREN ECKER HONORABLE MINDY FEE HONORABLE KATE KLUNK HONORABLE RYAN MACKENZIE HONORABLE DAVID MALONEY HONORABLE LORI MIZGORSKI HONORABLE ERIC NELSON HONORABLE MICHAEL PUSKARIC HONORABLE PAUL SCHEMEL HONORABLE JUSTIN WALSH HONORABLE PATRICK HARKINS, DEMOCRATIC CHAIRMAN HONORABLE JEANNE MCNEILL HONORABLE DAN MILLER HONORABLE GERALD MULLERY HONORABLE ED NEILSON HONORABLE ADAM RAVENSTAHL HONORABLE PAM SNYDER
* * * * * Pennsylvania House of Representatives Commonwealth of Pennsylvania 2
ALSO IN ATTENDANCE: REPRESENTATIVE TOM CALTAGIRONE REPRESENTATIVE JOHN GALLOWAY
COMMITTEE STAFF PRESENT: JOHN SCARPATO MAJORITY EXECUTIVE DIRECTOR SHANNON WALKER MAJORITY RESEARCH ANALYST JENNIFER DODGE MAJORITY LEGISLATIVE ADMINISTRATIVE ASSISTANT II
HALEY SALERA DEMOCRATIC EXECUTIVE DIRECTOR EVAN FRANZESE DEMOCRATIC RESEARCH ANALYST 3 N D X E I
TESTIFIERS
* * *
NAME PAGE
REPRESENTATIVE TOM CALTAGIRONE PRIME SPONSOR OF H.B. 173...... 5
REPRESENTATIVE JOHN GALLOWAY PRIME SPONSOR OF H.B. 715...... 7
REPRESENTATIVE GERALD MULLERY PRIME SPONSOR OF H.B. 717...... 9
REPRESENTATIVE PAM SNYDER PRIME SPONSOR OF H.B. 718...... 10
SHANNON WALKER ON BEHALF OF REPRESENTATIVE DAWN KEEFER, PRIME SPONSOR OF H.B. 12 97 ...... 11
JENNIFER BERRIER DEPUTY SECRETARY, SAFETY AND LABOR MANAGEMENT RELATIONS, DEPARTMENT OF LABOR AND INDUSTRY...... 14
DREW SIMPSON SENIOR AREA MANAGER, KEYSTONE MOUNTAIN LAKES COUNCIL OF CARPENTERS .....18
ROBERT BAIR BUSINESS MANAGER, IBEW LOCAL 143...... 21
CARMEN WITMER J.D. WITMER DRYWALL, INC...... 24
HANK BUTLER EXECUTIVE DIRECTOR, PA COUNCIL OF GENERAL CONTRACTORS...... 31
SUBMITTED WRITTEN TESTIMONY
* * *
(See submitted written testimony and handouts online.) 1 4
1 P R O C E E D I N G S
2 * * *
3 MAJORITY CHAIRMAN COX: [inaudible] necessarily
4 a, you know, one size fits all for a bill, but I know the
5 issue of misclassification has been one that we've been
6 trying to figure out a way to tackle for a number of years.
7 And so I appreciate both of the gentlemen here
8 who have joined us who are not Committee Members at this
9 point. Representative Galloway is a former Chairman,
10 Minority Chairman for the Committee. But we've also got
11 some other Members here, and we'll be asking them to
12 provide a brief overview of their legislation. We do have
13 one Member who's not here, and so I've asked Shannon Walker
14 to give us a little summary of the legislation for
15 Representative Keefer.
16 But, again, we've got several proposals in the
17 Committee. We've got a number of stakeholders that we've
18 invited here today that we'd also like to get information
19 from them on how these various proposals impact them.
20 The larger issue of misclassification is one that
21 I know Representative Galloway's bill seeks to tackle in a
22 way that I don't know that has been utilized in this area
23 before, but I think it's a worthwhile endeavor. So today
24 is about providing an overview of the legislation regarding
25 misclassification, giving the bill sponsors an opportunity 5
1 to explain their perspective, why they introduced the bills
2 that they've introduced, and also provide, again, the
3 stakeholders the opportunity to kind of have a dialogue.
4 And I've found that the hearing structure where
5 we have everybody on a panel and kind of hear both sides of
6 the story if you will when a question is asked or when a
7 statement is made, it allows a little bit of the back-and-
8 forth that I've found has been very valuable in helping us
9 work through legislation and finding ways to move
10 legislation that at other times has been at a logjam.
11 So our sponsors are either at the table or a
12 stand-in in the case of Shannon or they're on the
13 Committee, and so I'm going to ask that the sponsors again
14 provide a brief introduction, overview of their
15 legislation, and perhaps just a little bit about, you know,
16 why this is important to them, why they introduced it.
17 And so I'm going to start with Representative
18 Caltagirone, who has House Bill 173. Thank you for joining
19 us.
20 REPRESENTATIVE CALTAGIRONE: Thank you, Mr.
21 Chairman. And, Chairman Cox, Chairman Harkins, everybody,
22 thank you for holding this hearing on the workers' bill,
23 including House Bill 173, which raises the grading of the
24 offense of intentionally misclassifying workers as
25 independent contractors when they are not. They are 6
1 employees under our law.
2 Sometimes these misclassifications can occur as
3 an honest mistake, and no good prosecutor will bring a case
4 in that instance. But after one offense, most employers
5 should be educated enough to know the difference and follow
6 the law correctly. My bill, House 173, establishes a
7 useful definition of intent where it says, "Evidence of a
8 prior conviction under this subsection should be admissible
9 as evidence of intent under subsection (a)."
10 Many jobs that earn family-sustaining wages that
11 do not require a four-year college degree frequently
12 contain some risk of bodily injury in an accident, and
13 having the correct workers' compensation coverage in place,
14 as my bill incentivizes, can be as important as a safeguard
15 against career-threatening injuries or bankruptcy.
16 I would urge the colleagues to take a look at
17 both sides of this issue, give the bill your consideration,
18 and remember that, you know, there have been both union and
19 nonunion contractors that have approached me over the years
20 saying, you know, those that are doing this should be
21 penalized, and of course the penalty is no more government
22 contracts for at least a five-year period.
23 That basically sums it up. Thank you, Mr.
24 Chairman.
25 MAJORITY CHAIRMAN COX: Thank you, Representative 7
1 Caltagirone.
2 Representative Galloway, would you like to take a
3 few moments?
4 And I didn't say this at the beginning, and I'm
5 not just saying it for you, Representative Galloway.
6 REPRESENTATIVE GALLOWAY: Keep it short, is that
7 what you're saying? Keep it short.
8 MAJORITY CHAIRMAN COX: I'm going to focus in on
9 you since you're, you know, the person at the table right
10 at the moment. I'd like all Representatives to try to keep
11 it to around two to three minutes for an intro, and then
12 there'll be a lot of time for discussion and so forth
13 afterwards.
14 Go ahead.
15 REPRESENTATIVE GALLOWAY: I appreciate that.
16 First of all, thank you, Representative Cox, Representative
17 Harkins, staff, Members of the Committee. I'm sorry. Can
18 you hear me now? Thank you. Thank you for not just today
19 but, you know, your focus on misclassification in previous
20 months.
21 As you know, I, along with Representative Mullery
22 and Representative Snyder, along with Haley, have been
23 working for about four years on a package of
24 misclassification bills. We all know misclassification is
25 a serious problem. We're losing literally hundreds of 8
1 millions of dollars, and it is causing a real problem in
2 both union and nonunion construction, along with other
3 industries across the State. So what I tried to do and
4 along with Representative Mullery and Snyder was to create
5 a package.
6 And the first part of that package you have
7 already addressed, which is to start with a joint task
8 force, which looks at the problem of misclassification.
9 Misclassification is currently illegal. The problems that
10 we are facing today is not -- we don't have to rewrite the
11 law. We don't have to reinvent the wheel. We're having
12 problems with enforcement and penalties. So what we came
13 up with was a task force that you have already passed
14 through this Committee, and then looked at specific bills
15 to increase penalties and enforcement.
16 My bill, 715, is very, very specific. Under Act
17 72 currently, under Hawbaker v. Workers' Compensation
18 Appeal Board, Pennsylvania courts have ruled that an
19 indefinite employment term is valid under Act 72. My bill
20 simply states that it amends Act 72 to make a contractor -
21 an independent contractor is only an independent contractor
22 if the project is project-specific and time-specific.
23 That's it.
24 MAJORITY CHAIRMAN COX: All right. And not to
25 get ahead of ourselves, we have that bill scheduled for a 9
1 vote tomorrow. We do plan on passing it, but I appreciate
2 your excitedness about it.
3 At this point I'd like to call on a Member of the
4 Committee, Representative Mullery, to give us a synopsis of
5 House Bill 717.
6 REPRESENTATIVE MULLERY: Thank you, Mr. Chairman.
7 My bill picks up where Chairman Galloway's bill
8 leaves off. It would increase administrative penalties for
9 violations of Act 72. My bill increases the civil penalty
10 to $2,500 for first violations, $5,000 for second and
11 subsequent violations. That's an increase from $1,000 and
12 $2,500 respectively. My bill also increases the amount in
13 court-assessed penalties to $2,500 for each day that a
14 stop-work order is violated. That is an increase from
15 $1,000. My bill increases the administrative fine imposed
16 if a person requires an individual to enter into an
17 agreement that results in the improper misclassification as
18 an independent contractor to an amount between $2,500 and
19 $5,000. That is an increase from $1,000 to $2,500.
20 Finally, House Bill 717 amends the use of penalty funds in
21 the act by directing a portion of the sums collected to DLI
22 for costs related to enforcement.
23 Mr. Chairman, I think H.B. 717 has the potential
24 to serve not only as a deterrent to criminal
25 misclassification but also provide a more appropriate 10
1 penalty for violators across the Commonwealth. And I thank
2 you for having this hearing today and giving us an
3 opportunity to explain our legislation.
4 MAJORITY CHAIRMAN COX: Thank you, Representative
5 Mullery.
6 Now, we'll hear from Representative Snyder
7 regarding House Bill 718.
8 REPRESENTATIVE SNYDER: Thank you, Mr. Chairman.
9 As you know, Act 72 is complaint-driven. One of
10 the criticisms that I've heard often is when someone files
11 a complaint, they never hear back from the Department of
12 Labor. Therefore, they don't know if their complaint has
13 fallen on deaf ears or not. Although I understand there
14 are limits to what the Department can disclose during an
15 investigation, I believe that the Department needs to
16 acknowledged the receipt of the complaint.
17 So my bill is very simple. It would require the
18 Department of Labor and Industry to confirm receipt of the
19 complaint within 15 days so that the complainant knows that
20 their complaint has been heard. Thank you, Mr. Chairman.
21 MAJORITY CHAIRMAN COX: All right. Thank you,
22 Representative Snyder.
23 Representative Keefer had a prior engagement on
24 her calendar for several months now. I was not aware of
25 that when I scheduled today as the hearing, and so I'm 11
1 asking Shannon Walker, who is an individual staffing the
2 bill on the Committee who has worked on the bill. I'd like
3 you to provide a little bit of a synopsis and an overview.
4 Thank you.
5 MS. WALKER: Sure. Thank you. Representative
6 Keefer's House Bill 1297 amends section 3 of the
7 Construction Workplace Misclassification Act to allow the
8 registration of a contractor under the Home Improvement
9 Consumer Protection Act to constitute prima facie evidence
10 that an individual is an independent contractor as defined
11 in the act.
12 So currently under the Home Improvement Consumer
13 Protection Act, contractors who offer home-improvement
14 services to the public are required to register with the
15 Attorney General's office. The registration process
16 requires the contractors to provide personal and business
17 information, information on any prior bad acts, and proof
18 of liability insurance, along with a $50 biannual fine -
19 fee, fee, sorry.
20 MAJORITY CHAIRMAN COX: Fee as opposed to fine?
21 MS. WALKER: Correct.
22 MAJORITY CHAIRMAN COX: Okay.
23 MS. WALKER: Thank you.
24 MAJORITY CHAIRMAN COX: All right. Well, I
25 appreciate the Representatives providing the synopsis and 12
1 overview. I'd like to offer you both the opportunity to
2 stay in the room. I don't how much room we have as far as
3 seats at the table if you will, but we certainly invite you
4 to stay, and if you have questions for the stakeholders,
5 just get my attention, and we'll give you the opportunity
6 to ask those questions if you would like to do that during
7 the remainder of the hearing.
8 But again, thank you for your testimony. Thank
9 you for being with us here today. At this time I'd like to
10 invite -
11 REPRESENTATIVE MULLERY: Thank you.
12 MAJORITY CHAIRMAN COX: Absolutely.
13 REPRESENTATIVE MULLERY: Thank you very much. I
14 appreciate it. Thank you, Ed.
15 REPRESENTATIVE NEILSON: I wanted to question
16 you, though.
17 REPRESENTATIVE MULLERY: I'm sure you did.
18 MAJORITY CHAIRMAN COX: You can do that on your
19 own time, Neilson.
20 All right. And at this time I'd like to invite
21 our stakeholder panel to come up to the -- can't call it a
22 podium -- our arrangement of tables and chairs. There's
23 got to be a formal name for that I just don't know. But
24 we've invited the Department of Labor and Industry here.
25 We also have representatives from a couple of trade unions 13
1 and representatives from the construction industry.
2 And our goal here today is to, again, hear their
3 thoughts on Act 72, the problems with it, possible
4 solutions, and, you know, where do we go from here.
5 So I'll tell everyone who we have here, and then
6 I'll introduce them again as we move forward. But today,
7 we have -- if I mispronounce your name, please forgive me.
8 I'll get it better next time. But we have Jennifer -- is
9 it Berrier?
10 MS. BERRIER: Yes.
11 MAJORITY CHAIRMAN COX: Deputy Secretary for
12 Safety and Labor Management Relations with the Department
13 of Labor and Industry. We have Drew Simpson, Senior Area
14 Manager for the Keystone Mountain Lakes Council of
15 Carpenters; Robert Bair, Business Manager with IBEW Local
16 143; Carmen Witmer with J.D. Witmer Drywall, Inc.; and Hank
17 Butler, Executive Director of the PA Council of General
18 Contractors.
19 Before we begin, I'd like to remind everyone
20 you've been instructed prior to this to try to keep your
21 remarks to around five minutes. The young lady who just
22 made her debut in offering a public summary from the table
23 has a clock with a timer, and she has a set of throwing
24 knives which she'll utilize to stop you if need be. But at
25 about 30 seconds you'll hear the signal, and that'll give 14
1 you the opportunity to wrap up fairly quickly so we can try
2 to stay on schedule.
3 So, again, thank you all for being here, taking
4 the time out of your day. I hope we have a productive
5 hearing today. At one point during the hearing I'll be
6 needing to step out. I've asked the gentleman who had to
7 step out for another engagement, he's my Vice Chairman,
8 Representative Ryan Mackenzie. He will be back and he will
9 handle the hearing in my absence if things are still going
10 by the time that comes about.
11 So at this point I'd like to start with Deputy
12 Secretary Berrier. Please begin when you're ready.
13 MS. BERRIER: Great. Thank you, Chairman Cox,
14 Chairman Harkins, and Members of the House Labor and
15 Industry Committee, for having a seat at the table for
16 labor and industry at this discussion. I'm very grateful
17 to be before this esteemed Committee again to discuss a
18 suite of House bills that aim to strengthen Act 72 and
19 further combat the harmful practice of misclassifying
20 employees as independent contractors on construction sites.
21 I provided formal written testimony. However, as I learned
22 from last time about the five-minute time limit, I've pared
23 down my oral remarks.
24 It's easy to see why worker misclassification is
25 synonymous with tax fraud. Contractors who purposefully 15
1 misclassify their employees dodge their responsibility to
2 pay Federal, State, and local taxes. Federal, State, and
3 local governments lose out on much-needed revenue to
4 support services provided to taxpayers.
5 Just to give you an idea of what this means,
6 labor and industry's Unemployment Compensation Tax Office
7 identified more than $41 million in underreported wages in
8 the construction industry since 2018. Nearly 2,100
9 employees were misclassified as independent contractors,
10 and approximately $1.7 million in contributions were
11 recovered by the U.C. Tax Office, $1.7 million for a year
12 and a half of misclassification in just one industry alone,
13 and this is only as it relates to unemployment
14 compensation. Imagine the consequences on other tax
15 programs and the cumulative effect.
16 This Legislature passed Act 72 to combat this
17 very problem in the construction industry, and the
18 Department began its Act 72 enforcement in 2009. While
19 enforcement activity was minimal for several years
20 following passage of the act, since Governor Wolf took
21 office, the Department has stepped up its enforcement
22 efforts. From 2015, the Department has fined over 700
23 contractors and collected nearly $1.6 million in penalties.
24 In 2018 alone the Department's Bureau of Labor Law
25 Compliance collected nearly $567,000 in fines from more 16
1 than 200 contractors. That's a 57 percent uptick from the
2 previous year and a banner year in Act 72 enforcement for
3 the Bureau. This is the direct result of a department
4 internal task force that promotes information-sharing and
5 cooperative investigations between the Bureau of Labor Law
6 Compliance, U.C. Tax Office, and Workers' Compensation.
7 But while the Department has made great strides
8 in Act 72 enforcement, we need to do better. There are
9 significant barriers to curbing misclassification on
10 construction sites, and there are weaknesses within Act 72
11 that permit the underground economy in the construction
12 industry to thrive. The Department has been conducting
13 construction site visits and is more commonly finding out-
14 of-state labor brokers who have 3 0 or more workers on a
15 jobsite performing construction work. These workers are
16 paid cash and are not provided adequate safety equipment
17 and apparatus.
18 Many of these workers are vulnerable, low-skilled
19 workers with barriers to employment who are exploited
20 because of their desire to work and support their families.
21 These vulnerable workers have a disincentive to report
22 violations or file complaints with the Department.
23 Uncooperative workers make these cases very difficult to
24 investigate and even more difficult to prosecute.
25 Currently, Act 72 does not provide the Department 17
1 with all the tools it needs to effectively investigate and
2 penalize out-of-state labor brokers. The act does not have
3 any recordkeeping requirements, nor does the Department
4 have any authority to investigate records or have explicit
5 access to private jobsites.
6 Additionally, the Department's stop-work-order
7 authority is ineffective. The law lays out a process that
8 requires an order to show cause and an opportunity to
9 respond. This is at least a 20- to 30-day process, and by
10 the time an order is ready to be issued, the work's already
11 completed and the workers are off the site.
12 Lastly, the act's penalties at $1,000 a violation
13 are not a deterrent. Many of these labor brokers would
14 rather take the chance of misclassifying their workers and
15 paying the fine. It still works out to their benefit.
16 For these reasons, the Department welcomes your
17 proposed changes to Act 72, changes that provide greater
18 authority and resources to the Department, changes that
19 strengthen penalties for violators, and changes that
20 penalize subcontractors and general contractors who benefit
21 from work that is performed by misclassified workers. We
22 are appreciative for the introduction of the House bills
23 that are the topic for this hearing so we can improve our
24 ability to investigate and impose meaningful penalties.
25 The Department looks forward to ensuring that 18
1 employees are paid properly and engage in safe work
2 practices, ensuring employers pay their fair share of taxes
3 and adhere to workplace safety rules, and ensuring that all
4 contractors and subcontractors are on a level playing field
5 and do not have an unfair competitive advantage over one
6 another through illegal means.
7 Thank you for the opportunity to testify today.
8 MAJORITY CHAIRMAN COX: Thank you. Next, we'll
9 hear from Mr. Simpson with the Keystone Mountain Lakes
10 Council of Carpenters.
11 MR. SIMPSON: Good morning, Chairman Cox,
12 Chairman Harkins, Committee, and thank you for this
13 opportunity. My name is Drew Simpson. I am the Regional
14 Manager for the Keystone Mountain Lakes Regional Council of
15 Carpenters.
16 First, let me say my organization is grateful to
17 you and the Committee for your willingness to hear our
18 input into proposed legislation relating to independent
19 contractor misclassification in the construction industry.
20 Several weeks ago, my colleague Tom Breslin
21 testified before you on the chilling impact this illegal
22 practice has on State economies and the disadvantages
23 placed on law-abiding employers in the construction
24 industry. In 2010, the Legislature passed Act 72 to
25 address this issue of misclassification. Given almost a 19
1 decade has passed between then and now and I think can
2 objectively evaluate where the law hits the mark and where
3 it falls short. In our views, it is not necessary to
4 reinvent the wheel so to speak. We don't need more
5 process; we need resources to better address enforcement,
6 and we need penalties to create a deterrent to discourage
7 this illegal practice.
8 Misclassification is fraud, tax fraud, and should
9 be treated as such. For example, the tax code states in
10 part intentional failure on the part of a party to collect
11 or remit full tax due may subject the taxpayer to a 50
12 percent penalty. That may catch someone's attention.
13 House Bill 173 and 717 attempt to increase penalties, but
14 our experience that monetary fines, even at the $2,500
15 level, are an insufficient deterrent. Further, House Bill
16 173 appears that it would only apply to Commonwealth work,
17 which, if our reading is accurate, would amount to a
18 rollback from what exists presently.
19 House Bill 717 and 718 reference stop-work
20 orders, which could serve as an effective tool in combating
21 the practice of misclassification. By shutting down a
22 project, it brings the end-user or project owner front and
23 center. Often, these individuals plead ignorance to the
24 activities taking place at ground level on projects they
25 are financing. Stopping work on a project would have 20
1 economic implications to the owner, thus putting the onus
2 on them to bring the practice to an end.
3 In 2017, the Legislature passed Act 132, which
4 gives the Secretary of Labor and Industry the power to shut
5 down employers over failure to pay required workers'
6 compensation taxes, and the Legislature is to be commended
7 for that.
8 However, for stop-work orders to be truly
9 effective, they require immediate application. A drawn-out
10 process such as that outlined in House Bill 718 really
11 wouldn't be effective in the construction industry. By the
12 time the process concludes, chances are the work would be
13 complete, the contractor has moved on, and the stop-work
14 order rendered useless. It appears that the Workers'
15 Compensation Act already offers the authority to
16 municipalities when notified that workmen's comp coverage
17 or self-insured status does not exist. In New Jersey there
18 is legislation pending that would empower the State Labor
19 Commissioner to shut down projects if they determined laws
20 were being broken. The Committee might want to consider
21 something similar to that here in Pennsylvania.
22 House Bill 1297 effectively serves as self
23 declaration of independent contractor status, which is
24 troublesome on multiple levels. While our membership is
25 not engaged in the home-improvement marketplace, self 21
1 declaration could open the door for perpetuation of the
2 existing problem and for contractors to engage both in and
3 out of the market, and it could create two different
4 standards, which is bound to lead to confusion.
5 Finally, House Bill 715 pertaining to written
6 agreements for independent contractors we believe that
7 would be helpful towards facilitating compliance with the
8 existing statute.
9 So, in summary, we would support House Bill 715,
10 oppose House Bill 1297, and the remaining bills 173, 717,
11 718 are well-intended, as they may require some extra work
12 in our view.
13 Again, thank you, and I'm happy to answer any
14 questions at the end. Thank you.
15 MAJORITY CHAIRMAN COX: Thank you. Next, we'll
16 hear from Mr. Bair with IBEW Local 143.
17 MR. BAIR: Chairman Cox, Chairman Harkins,
18 Members of the Committee, thank you. I had a statement
19 prepared, but Drew pretty much said everything. And Drew
20 and I have worked together for quite a few years, along
21 with Representative Neilson back there.
22 But one of the things that I've been hearing that
23 I wanted to speak about was we heard about fraud, we heard
24 about tax collection, we heard about fining the employers,
25 compliance, but let's not forget that one of the things 22
1 that we should be doing is always remembering the employee
2 in this, okay? Because the person most affected by this
3 legislation is the guy doing the work.
4 I've spent 32 years in the construction industry,
5 20 of them in the field from an apprentice till the time I
6 became business manager. I've seen misclassification
7 upfront firsthand since 1987. I've seen people get hurt,
8 have been misclassified and have no workmen's comp. They
9 had no insurance. They lost their homes, families, right?
10 Everything that we do, the very first thought in our head
11 is how do we protect the constituents of this Commonwealth,
12 and how do we make sure that the laws that we pass protect
13 them?
14 Yes, the employers are a big factor in this, and
15 we have a lot of good employers on both sides of the aisle.
16 I heard former Chairman Galloway and Caltagirone say union
17 and nonunion. It's not a union/nonunion issue. This is a
18 people issue. This is an issue about honest contractors
19 doing the right thing, paying in on their employees, making
20 sure their employees are covered, and not stealing out of
21 their pocket.
22 I've personally seen people get paid in cash. I
23 know it happens. We all do. We've seen it. And it makes
24 it very, very hard for an honest contractor to bid those
25 type of projects, but it also leaves the employee totally 23
1 at risk because at the end of the day there's nobody there
2 to look out for him. There's nobody to fight for him.
3 There's nobody to stand up and say this is wrong, and we're
4 not going to tolerate this inside the boundaries of this
5 Commonwealth.
6 Drew was spot on with where we feel the
7 legislation should be. I'm here as a business manager, as
8 a board member of the State building trades. We have
9 125,000 construction workers across this State, well-
10 trained, well-paid, okay? Every day they get up, they
11 strap their boots on, they go do a good job. The people
12 that we work for, the contractors we work for, the clients
13 we work for, they get the best job.
14 We want everybody in Pennsylvania to have that
15 opportunity. We want everybody to be able to get up and
16 make a living. We want everybody to know they have
17 protections that work. What's wrong with having a job that
18 you know if you get hurt you have workmen's comp insurance?
19 If you fall four stories off a scaffold and you're an
20 independent contractor, where does that leave you if you've
21 been misclassified? How do you go home to your wife and
22 kids at night and you can't pay your bills, okay?
23 So I'll be happy to answer any questions at the
24 end. After listening to Drew and my esteemed colleague to
25 my right, I knew I could be brief. Thank you for your 24
1 time. Thank you for your consideration of these bills.
2 And thank you for remembering it's about the employees.
3 Thank you.
4 MAJORITY CHAIRMAN COX: Thank you. Next, we'll
5 hear from Ms. Witmer with J.D. Witmer Drywall.
6 MS. WITMER: Good morning. I would like to thank
7 Chairman Cox and Chairman Harkins and the Members of the
8 Committee for the opportunity to testify this morning.
9 My name is Carmen Witmer. My husband Jared,
10 who's sitting on the panel, is the owner and President of
11 J.D. Witmer Drywall. We are Dover residents. We've been
12 there many, many years. We both graduated from Dover in
13 19 98. During our high school years, Jared had the
14 opportunity to learn the trade of drywall from his older
15 brother, and once he graduated high school, he decided to
16 go into business for himself, and things were going very
17 well.
18 In 2004, we began our family, and he purchased a
19 small Cape Cod and had an additional garage for holding his
20 scaffolding and drywall tools, and that is still the home
21 we live in today, four children, and 15 years later.
22 So the life that we live as Jared being the owner
23 of a small business looks like this. He gets a call from a
24 builder or a small general contractor and a homeowner, and
25 he's the one who goes to the job and he measures the job 25
1 out, he gives them the price, they say yes or no. He's the
2 one who supplies all the materials. He calls around to
3 find out if another entity that he works with who hangs the
4 board is available to go there and start the project for
5 him and the hanging, and then he will finish up the job and
6 get ready for paint.
7 He's an extremely task-oriented hard worker, and
8 he is also very mindful of his clients. He works in a way
9 where he doesn't want to disrupt the process and the flow,
10 so he wants things to be done correctly but also in a
11 timely manner, and he pushes himself to complete those jobs
12 and comes home very exhausted at the end of the day.
13 So in your communities this would be your small
14 drywall contractor who you would call if, say, your
15 basement flooded and you needed to gut the whole thing and
16 needed some good drywall contractor to come in and redo
17 that so you could utilize your basement or if you had a
18 leak in the roof and you needed to match the texture on the
19 ceiling. That's what my husband does. We are the face of
20 the small business contractor in your community.
21 Jared does not have employees. He does not have
22 project managers like a lot of the very large drywall
23 outfits. And for this reason he is always the one on the
24 jobs working. And sometimes if he needs to, he'll call in
25 an extra hand to finish the jobs, but to keep business 26
1 rolling, he has to have help from other subcontractors,
2 hangers, you know, and if a hanger is not available, he
3 calls around to another hanger, hey, are you guys
4 available? So he'll go, let them take care of the hanging,
5 and he will be the one finishing the job so that he can
6 keep business rolling, and that way we still have funds.
7 I don't believe that our small business is in any
8 way comparable to a large drywall outfit. And in the fall
9 of 2012, we -- that's not my bell, is it?
10 MAJORITY CHAIRMAN COX: [inaudible].
11 MS. WITMER: We received notice from the
12 Department of Labor and Industry that we were going to be
13 having an audit done on the business, and the auditor of
14 course ask for many of our documents pertaining to the
15 business year 2011, and we were told later on that this was
16 in reference to Act 72, which we were not informed of, we
17 knew nothing about, and we were also very naive to the
18 whole process of being audited, but we trusted our
19 accountants, and we believed that they were going to help
20 us handle it.
21 And so during the process of the audit in 2012
22 the auditor, I guess, was unhappy with our records, decided
23 to open up the previous three years, 2008, 2009, and 2 010.
24 Is that my bell? I have a lot more.
25 So the final assessment came in, and it was over 27
1 $13,000, and we didn't understand why they were assessing a
2 penalty of $13,000. But basically what it came down to was
3 they decided that whoever Jared had paid from the business
4 was our employee, and we had tried to tell them we don't
5 have employees and we use only subcontractors, but because
6 on our part we did not have the records to show otherwise,
7 the auditor did not want to hear anything else.
8 And I remember being on the phone with the
9 auditor and I told him we've given you documents to show
10 that some of these people are not our employees, and the
11 auditor's comment was, "In my opinion, these are your
12 employees." So we were not advised. We had never gotten
13 an attorney, and we missed the opportunity to file an
14 appeal.
15 In desperation, though, we decided to try and
16 file a late appeal, and that was denied. We also tried to
17 receive like a -- what's the word? A compromise on the
18 interest and penalties, and that was denied.
19 So at times we had to take out a small line of
20 credit to keep paying subcontractors that were hanging jobs
21 for him just so we could continue to allow good business
22 relationships while we waited for money from the builders
23 in excess of sometimes 30 days. And so this $13,000
24 assessment was not feasible for us. We were devastated.
25 We didn't understand how they could tell us, they could 28
1 tell us that they were our employees. And in order to pay
2 that assessment, we had to pull together some savings along
3 with some money my mother gifted to us just so we could get
4 that behind us.
5 And so in 2015 it was over, and the auditor had
6 told us what kind of documents that we should have been
7 filed, not giving any resources, but we decided to go ahead
8 and pull together those documents for our future and we had
9 peace of mind and we were just going to get behind it.
10 But two years later in 2017 we received another
11 notice in the mail saying that we were going to get audited
12 again. And the idea of going through that again made my
13 stomach sick. I didn't even know how I was going to tell
14 Jared that we were getting audited again. But we gave
15 complete confidence and we were confident that we had made
16 changes based on the recommendations of the first auditor,
17 and we supplied the auditor with all documents that he
18 could ask for for that year, which was in -- we were
19 looking at 2016. And our new accountant, sat down with him
20 and gave him all the documents and records from our tax
21 books. And our accountant was like you guys are good as
22 gold, and we felt very confident.
23 But the auditor again decided to open up three
24 more years. We didn't know what he was looking for, but we
25 gave him all the documents that he'd asked for for those 29
1 three other years, and in the end, the assessment came back
2 over $15,000 saying that our subcontractor agreement was
3 not sufficient. There was never a call from the auditor as
4 to why the subcontractor agreement was not sufficient.
5 There was no details or explanation, and there was no
6 bargaining.
7 We got an attorney, and we quickly went to work
8 fighting it, and our attorney had been on the phone
9 multiple times with the Department of Labor and Industry's
10 auditor, and there was just no give.
11 So to this date we are still at the tail end of
12 working on fighting that audit. And we knew that we had to
13 accept some of the blame for the first audit because we
14 were not in compliance with the law, but we did not know
15 about it. So this time we knew something was wrong because
16 we had all of our documents, and there was no reason for us
17 to have an assessment.
18 Our concern is that when we look at these House
19 bills and we see fines and penalties and enforcement and
20 all those terms that talk about basically a negative attack
21 against a small contractor, it hits personally home to us
22 because, for one, the communication on behalf of the State
23 to make sure contractors are aware of what they should be
24 doing is minimal at best. We were not aware. If we had
25 known, we would have made every effort to comply the first 30
1 time, okay? There was no warning.
2 And secondly, you know, there's the feeling that,
3 as a contractor, you're working hard. You want recognition
4 for your hard work, but in the end, what he's building up
5 diligently, a State Department is coming and saying
6 basically we are taking your money and we are going to tell
7 you that you've done something wrong even though you're
8 telling us you did it right, and there's no regulation on
9 the part of that Department or requirement for them to
10 prove their claim. We've done our part, but they did not
11 do anything to prove their part. So if you're going to
12 tell us they're our employees, then prove that they are our
13 employees based on your opinion is basically what it came
14 down to was always opinion.
15 So we have a lot of recommendations, and I know
16 I'm over my time, so I can save them, but I think that we
17 have some serious concerns about just the idea that small
18 contractors, if they're penalized to the degree that I'm
19 hearing, our business would be done. And the feeling of
20 being like we're criminals is also the idea we're getting
21 from some of the bills.
22 But I can save more for the questioning, so thank
23 you for your time.
24 MAJORITY CHAIRMAN COX: All right. Thank you.
25 Last, we'll hear from Mr. Butler with the PA 31
1 Council of General Contractors.
2 MR. BUTLER: You want me to follow this?
3 MAJORITY CHAIRMAN COX: If you are able to, yes.
4 MR. BUTLER: Okay. Because she did a good job,
5 and I don't know what I can say right now, but okay. You
6 did a good job.
7 Okay. The clock's starting. Okay. Thank you,
8 Chairman Cox, Chairman Harkins, and Members of the
9 Pennsylvania House of Representatives Labor and Industry
10 Committee for the opportunity to speak with you today
11 regarding the independent contractor issue, reforms to Act
12 72 of 2010.
13 The Pennsylvania Council of General Contractors
14 believes in the principles of fair, efficient, and
15 competitive construction, bidding, awarding, and building.
16 Pennsylvania Council of General Contractors was actively
17 involved in the negotiations and passage of Act 72 of 2010.
18 The council's concerns then and now is that any legislation
19 should be written to not hinder those companies who follow
20 the laws of our State and Nation.
21 Penn CGC does not support using independent
22 contractors or misclassified workers to win work, but at
23 the same time, we need to protect the contractors who
24 multitask on their respective worksites. Contractors and
25 employees who choose not to be signatory to a collective 32
1 bargaining agreement are sometimes penalized because their
2 multitasking abilities to work on construction sites.
3 In collective bargaining work, the work rules
4 between the different trades are clearly defined between
5 the respective work. The workers only work on their
6 regulated tasks. For contractors and employees who are not
7 subjected to these regulated work rules, the interpretation
8 becomes unclear, especially with enforcement. For example,
9 do you pay an electrician's rate -- no offense,
10 Representative Neilson, on this one. It was not
11 intentional at all. For example, do you pay an electrician
12 rate to move wiring on a construction site or pay a
13 laborer's rate? When moving roofing shingles, do you pay a
14 roofer or laborer's rate? On a private project, not
15 prevailing wage, it does not work attempting to fit union
16 work rules into an organization that does not require
17 restrictive guidelines. Any reforms to Act 72 -- sorry, I
18 missed that -- of 2010 needs to respect the rules set forth
19 by each respective entity working in Pennsylvania, those
20 who are signatory and not signatory to a collective
21 bargaining unit.
22 Since the passage of Act 72 and 2010, the Penn
23 CGC members have not brought forth concerns on the
24 independent contractor issue to the council. As we look to
25 numerous bills and issues coming before the Pennsylvania 33
1 Legislature, Penn CGC would recommend to look towards House
2 Bill 716 with amendments introduced by Representative
3 Galloway. House Bill 716 is the development of a task
4 force with amendments comprised of the Pennsylvania
5 agencies and contractors involved in the independent
6 contractor issue. The task force, done the correct way,
7 needs to look at the issue in an objective, unbiased, and
8 nonpolitical way to examine the situation in the most
9 comprehensive manner possible, and only then can we have
10 stakeholders looks towards improvements to the act.
11 As stated before, the Pennsylvania General
12 Contractors do not support the use of independent
13 contractors to win work on construction sites, but any
14 legislation should be written to not hinder those companies
15 who follow the laws of our State and Nation. With that,
16 it's important to have Act 72 of 2010 task force clearly
17 focused on the independent contractor issue to include
18 stakeholders and experts in the construction community to
19 help the task force's politicians and appointed officials
20 understand and comprehend the entire construction climate
21 before them.
22 Moving forward, the Pennsylvania Council of
23 General Contractors would like to work with Chairman Cox,
24 Chairman Harkins, and the Labor and Industry Committee to
25 help move this effort forward in a comprehensive and strong 34
1 direction. Thank you.
2 MAJORITY CHAIRMAN COX: Thank you. And I'd like
3 to thank all of you collectively for taking the time to
4 testify today. We've kind of heard strengths, weaknesses,
5 and all of that. And our goal in having a hearing like
6 this is not to say, you know, we're definitely going to
7 charge ahead on this piece of legislation or that piece of
8 legislation. Those of you who've seen how I work with this
9 Committee, it's not a full-steam-ahead on issues that are
10 as complicated as this issue can be.
11 And so the last thing I want to do as a
12 Representative is to have to go back to my district and
13 say, hey, small business, we're going to give somebody the
14 ability to hit you with a fine or a fee without notice.
15 I've heard similar stories from the Department of Revenue
16 or from individuals interacting with the Department of
17 Revenue. And this is, again, my perspective on this larger
18 issue. I don't want to create another "aha" moment for any
19 of the Departments, whether it's Department of Revenue,
20 Department of Labor. I don't want any of the departments
21 showing up with that, aha, we got you, $13,000 in fines,
22 $15,000. And that's what we've seen over the years. The
23 Department of Environmental Protection is another one that
24 we've seen that happen with where it's this -- I'll just
25 describe it as that aha moment which that's not the way 35
1 government should be interacting with its constituencies.
2 For years I had heard from constituents that the
3 Department of Agriculture was kind of this model agency,
4 and that's what I'd love for the Department of Labor and
5 Department of Revenue to be where they come in and they
6 kind of put their arm around you and say, listen, you may
7 not realize this, but there's a law that says such-and-
8 such. You need to start doing it this way.
9 And I'd like to -- I would never correct my
10 children. I have five children. I would never, you know,
11 go to them and say, hey, you did such-and-such and, you
12 know, punish them if they didn't know what they were doing
13 was problematic, if they could show me that they were
14 trying to comply with what they thought I was trying to do.
15 You know, we've got to be more commonsense in our approach
16 because we are impacting businesses on a major scale with
17 actions like you've described.
18 And so part of my reason for having this hearing
19 is to bring that to light, the story that Ms. Witmer told
20 here today on how current practices are impacting our
21 businesses and how we can -- you know, we've got to figure
22 out a way to tighten things up and do things more
23 appropriately. You know, we pass laws to be enforced
24 obviously, but the goal is never and should never be to
25 catch unwary citizens and their businesses in a trap. 36
1 And so, again, thank you all for your testimony.
2 I think we all have an agreement on where we would like
3 this to go, and that is we want to make sure -- and I
4 think, you know, Mr. Bair described it very succinctly.
5 This is about making sure the workers are taken care of,
6 making sure that businesses are taken care of because
7 without the businesses, you don't have workers. And so
8 it's that balancing act of making sure the law is being
9 followed and that if there is a classification problem,
10 let's identify it, let's take care of it, and let's make
11 sure.
12 But we also don't want to create any traps in the
13 nuances of the law that really hamper business in
14 Pennsylvania because when businesses suffer, employees
15 suffer, and when the employees suffer, the entire State
16 suffers, and we get that.
17 I'll reserve some of my additional comments and
18 questions for later on. I do, again, want to thank you so
19 much. I know it can be a task sometimes to carve out a
20 schedule to come and be with us today.
21 I'm going to let Chairman Harkins make a few
22 comments, ask any questions he might have.
23 DEMOCRATIC CHAIRMAN HARKINS: Thanks, Chairman
24 Cox.
25 Thank you all for your testimony. It's very 37
1 insightful, very much appreciated.
2 And I also wanted to mention that Chairman
3 DiGirolamo and I have also been working closely with the
4 Department of Labor and Industry on another
5 misclassification bill. And, unfortunately, we were unable
6 to get it introduced prior to this hearing, but we did
7 circulate a cosponsor membership this morning.
8 Our legislation would increase fines for
9 violations and add department as a penalty, enable the
10 Department to execute stop-work orders for violations
11 immediately, keeping in mind, though, people like the
12 Witmers. I know there's a number of them across the State.
13 You do your best, you work your hardest, put out a good
14 product, and you feel like you're being kicked in the butt.
15 But I see both sides of it. I worked for UPS for 25 years
16 in Erie, encountered a lot of things with that job that I
17 saw things, both good and bad. But believe me, we're on
18 your side. We want to help you out, looking out for people
19 like you in those positions.
20 The legislation, though, also would provide the
21 Department the authority to investigate worksites and
22 review employer records. Unlike other labor laws, Act 72
23 does not provide the Department with clear authority to
24 investigate complaints, including entering and inspecting
25 worksites or compelling the production of records. 38
1 Currently, the Department has little recourse if employers
2 fail to respond to requests for information.
3 This would also require general contractors to
4 take more responsibility for subcontractors who misclassify
5 their workers. I've seen a lot of that, had a lot of calls
6 on that. The act requires penalties to be applied to
7 parties who knowingly contract with a subcontractor who
8 misclassifies workers. However, this section must be
9 clarified for greater effectiveness.
10 So I'm going to encourage my colleagues to sign
11 on as a cosponsor, and I look forward to feedback from all
12 of you once this bill is introduced, as well as employers
13 like yourself, small mom-and-pop shops.
14 And again, thank you.
15 MAJORITY CHAIRMAN COX: All right. Thank you,
16 Chairman Harkins.
17 Our first -- and I'll remind him to be brief -
18 person with questions is Representative Neilson.
19 REPRESENTATIVE NEILSON: Thank you, Chairman.
20 Carmen, first off, thanks. This is probably
21 something difficult that you've had to do. I know as an
22 electrician, my wife, if I put her in front of a
23 microphone, she'd be like boom, but we know who runs the
24 house, okay? He just thinks he's in charge back there.
25 But thank you so much. 39
1 And you brought something really good up,
2 education. So, Jennifer, my question's going to go to you.
3 She brought up a great point that she doesn't know the
4 rules. She's been given a task and hit with a fine. How
5 is the department notification done? Do we notify through
6 the Department of Revenue when they register as a
7 contractor or go into business? I mean, is there anything
8 that we do there?
9 MS. BERRIER: Okay. So -
10 REPRESENTATIVE NEILSON: Do you know?
11 MS. BERRIER: Yes -
12 REPRESENTATIVE NEILSON: I don't.
13 MS. BERRIER: -- actually -- and I believe what
14 happened with that situation, with your situation, Carmen,
15 it was actually an assessment by our U.C. Tax Office. This
16 wasn't under Act 72, so I'm not quite sure how their
17 procedure works and their education works. But I know that
18 for us we issue an annual report which kind of lays out Act
19 72. We also have Act 72 posters. Our investigators, our
20 staff are really big promoters of educational materials.
21 It sounds like we need to do a better job, which we
22 certainly will in the future so this doesn't happen again.
23 REPRESENTATIVE NEILSON: As soon as we go through
24 the process, don't be surprised because it's something that
25 I'm sure the Chairman alerted many of us that that could be 40
1 an issue, and maybe the Department of Revenue has to send
2 something over there, too.
3 MS. BERRIER: Right.
4 REPRESENTATIVE NEILSON: Now, before my bell goes
5 off -- Carmen, they stop me on my bell -- but, Hank, we've
6 got a lot of good actors, bad actors. An electrician is an
7 electrician. I carry the wire, I dig the ditch, I do it
8 all. I'm an electrician by trade if you haven't noticed,
9 Carmen, and that's why we've been working together for long
10 time on a lot of things. And I think Bob Bair said it
11 great. You know, there's union, nonunion. We're after the
12 nonunion here. We're after the nonunion contractors.
13 Employers work to protect. Good employers always work to
14 protect, and hopefully we can get through that by doing
15 this.
16 And this is great conversation, and I'd like to
17 echo the Chairman on the testifiers. Thank you all for
18 being here today, and I'm going to let my questions go
19 because you all know them, where I'm at. But thank you,
20 Chairman, for moving this legislation forward.
21 MAJORITY CHAIRMAN COX: Thank you, Representative
22 Neilson.
23 Next, we have a question from Representative
24 Mackenzie.
25 REPRESENTATIVE MACKENZIE: Sure. Thank you, Mr. 41
1 Chairman.
2 I guess the first question would be to the
3 Department. Do you feel that between the Worker
4 Misclassification Act and HICPA and Federal law is there
5 consistency across all of these laws, and is there any
6 issues that we should be aware of that might be out of step
7 that we want to address so that it is easier for compliance
8 and everybody to understand?
9 MS. BERRIER: Sure, and I think that's a fair
10 question, and frankly, I think that's something that we
11 would need to look further into.
12 REPRESENTATIVE MACKENZIE: Okay. And -
13 MS. BERRIER: -- and we'd be happy to do that.
14 REPRESENTATIVE MACKENZIE: Yes, that'd be great
15 because, again, if we're going to be addressing these and
16 kind of making changes or cleaning things up, it might be
17 appropriate at this time to really go through and make sure
18 that everything is consistent just so that we can reduce
19 instances where people don't understand or kind of have
20 issues there. So that'd be great.
21 The second question I would have is also with -
22 I think it was previously just briefly mentioned around
23 registration, so is there any kind of database that the
24 Department has of all the different employers that are in
25 this space and working in this space? Do we have any kind 42
1 of comprehensive list out there, or is it kind of just the
2 wild west? Or how do we figure this out?
3 MS. BERRIER: So we do have records with our U.C.
4 Tax Office, and this is just for in-state employers.
5 However, you know, we don't have records for all of the
6 out-of-state workers that are out-of-state employers that
7 come into the State to do work.
8 REPRESENTATIVE MACKENZIE: Okay. And so those
9 records that are in the U.C. Tax Office, are they in any
10 way transmitted to labor law or the other division that
11 might be overseeing Act 72?
12 MS. BERRIER: Yes, actually, there's referrals
13 that happen each month, so our U.C. Tax Office will send
14 referrals of employers that they've audited and have found
15 assessments on, and they'll send those to our Bureau of
16 Labor Law Compliance, and we'll follow up with Act 72 -
17 REPRESENTATIVE MACKENZIE: Okay.
18 MS. BERRIER: -- violations on that.
19 REPRESENTATIVE MACKENZIE: And what is done for
20 the out-of-state employers? I mean, what if anything can
21 be done?
22 MS. BERRIER: And that's what we're really trying
23 to tackle right now. Without any kind of contractor
24 registration requirement in Pennsylvania, it's very
25 difficult to be able to find or assess these people. 43
1 REPRESENTATIVE MACKENZIE: Okay. All right.
2 Well, you know, I appreciate that, and I think we might
3 have some work to do there because, I mean, I think
4 understanding who all of those actors are that are out
5 there and operating would be very helpful in terms of
6 compliance in all of these different areas, so I think that
7 is something that we can work on together.
8 MS. BERRIER: Sure.
9 REPRESENTATIVE MACKENZIE: Thank you.
10 MAJORITY CHAIRMAN COX: Thank you, Representative
11 Mackenzie.
12 Next, we have a question from Representative
13 Mullery.
14 REPRESENTATIVE MULLERY: Thank you, Chairman Cox.
15 The first question is for Drew and Mr. Bair.
16 Obviously, your testimony was that you didn't feel the
17 increased penalties outlined in 717 would be effective. Do
18 you have a suggestion?
19 MR. SIMPSON: The penalties out there, the
20 financial penalties out there, whether it's $2,500 and
21 $5,000, whether it's $25,000 and $50,000 is a cost of work
22 to these unscrupulous contractors. You know, they will put
23 that -- when they're not paying their taxes, they are
24 saving so much money on a jobsite that they'll pay those
25 fines numerous times because that's how much money they're 44
1 making on these jobsites.
2 And even if you're talking about a prevailing
3 wage job, even debarment, a contractor who is debarred by
4 the State for having an issue with a prevailing wage, they
5 just shut the company down and they start a new one
6 tomorrow under a different name, and so they truly, you
7 know, aren't penalized. So until we get some criminal
8 legislation in their to where some people start going to
9 jail or however we want to do it, but monetary fines in my
10 opinion are never going to be a deterrent to these
11 unscrupulous contractors who are doing this.
12 MR. BAIR: I concur. We have a big problem in
13 the State of Pennsylvania not with small contractors that
14 we've heard of, which I would say that was god-awful what
15 you went through. As a chance to work as a project manager
16 for big company, I know how much work it was getting ready
17 for an audit for us, right, tax time. I think where we
18 need to go with the enforcement is like Drew said. The
19 fines are good start, but I've seen contractors shut down,
20 three weeks later open up under a new name. We see it all
21 the time, okay? There has to be a point where somebody
22 that is that unscrupulous can be charged criminally. It's
23 the only way you're going to stop them, right?
24 Every time this happens the State suffers, the
25 owners suffer, the employee suffers, okay? The guy getting 45
1 up every morning to go out and do his job, he is bearing
2 the brunt of the misclassification. He's losing money,
3 he's losing benefits, and it's blatantly unfair. It's
4 blatantly unfair.
5 And, you know, my grandfather used to always say
6 compliance comes with enforcement, but you don't need to
7 hit a mule in the face with a sledgehammer the first time,
8 okay? You can bring them slowly to the table, but when you
9 get them there, there has to be a point where it's going to
10 be enough of a penalty to make them stop doing what they're
11 doing, right?
12 I don't think Drew and I are advocating for, as
13 Chairman Cox said, running full steam ahead here and just
14 jumping into the pool with both feet. We're just saying
15 take a look at something and say here's what we're going to
16 start at, but there is going to be an end where we're going
17 to make the contractor quit this type of business model.
18 REPRESENTATIVE MULLERY: Thank you. My next
19 question is for the Deputy Secretary. Mrs. Witmer
20 testified that she received these notices in the fall of
21 2012 and May 2017. I understand now that you may believe
22 those to be unemployment compensation-related, but when it
23 actually is a misclassification investigation, two
24 questions: How are the employers notified, and how are
25 they selected for investigation? 46
1 MS. BERRIER: So currently right now with how we
2 conduct Act 72 investigations, it's either complaint-driven
3 or it's a referral from our U.C. Tax Office. We don't have
4 auditors. We have investigators who interview workers, and
5 that's basically how that's evaluated. We reach out to the
6 employer through writing, and there's plenty of contact
7 information with a description of the violation that, you
8 know, we believe have occurred, and we try to keep open
9 lines of communication because perhaps if there was
10 something in error, I mean, we're reasonable. We're not
11 looking to put people out of business. We're not looking
12 to be unreasonable in our application of Act 72.
13 REPRESENTATIVE MULLERY: Last question, and this
14 one's for you as well. Of the 700 contractors that you've
15 fined since 2017 and the 200 in the last year, how many of
16 those -- and this will go to what Drew and Mr. Bair have
17 talked about -- are repeat or chronic offenders?
18 MS. BERRIER: I would have to look at that. A
19 lot of them are referrals from our U.C. Tax Office, so
20 typically, they wouldn't be repeat or repetitive. I know
21 from practice of our U.C. tax audit what they'll do is
22 typically if they have someone who was assessed and found
23 to owe wages or owe taxes in a -- like I think they do it
24 every three years, they'll follow up three years later to
25 make sure that the employer is complying with what happened 47
1 previously.
2 MAJORITY CHAIRMAN COX: All right. Next, we have
3 a question from Representative Dush.
4 REPRESENTATIVE DUSH: Thank you, Chairman.
5 Carmen, you've been looking like you've been
6 chomping at the bit to answer a couple of these questions.
7 I'd like to give you the opportunity to reply to some of
8 this.
9 MS. WITMER: Thank you. So, for one, Mullery did
10 say that the enforcement through Act 72 is complaint-
11 driven. We have never been notified of any complaint
12 against our company or anybody trying to file for
13 unemployment compensation against our company. We were
14 never actually told even in writing why we were being
15 audited because we've asked quite a few times.
16 And in reference to the investigative part of it,
17 I think Jen said that they interview the workers
18 themselves. Is that what -
19 MS. BERRIER: That's what our office does. I
20 don't know what the U.C. -
21 MS. WITMER: -- the U.C., okay. -
22 MS. BERRIER: -- Tax Office does.
23 MS. WITMER: So I do remember you making that
24 clarification. And, currently, I just want to make it
25 clear that we made every effort to comply after the first 48
1 time, and what we kept hearing was an opinion. So the fact
2 that there is no real substantial evidence that we are out
3 of compliance and nobody is asking them to prove their
4 claim against us causes us to feel as though our efforts
5 were -- there was no reason for even trying, you know?
6 And the idea that we had to go and spend tons of
7 money to fight it just to get the right ears to hear our
8 situation is very disheartening. And we know many other
9 contractors out there who have been through this audit.
10 There's a lot of inconsistencies. We know of a close
11 friend who went through the audit, and the auditor looked
12 at his minuscule pile of papers with no subcontractor
13 agreements and said I think you're good. And not that we
14 want to see them fined, but there was a huge difference in
15 our auditing scenarios. We've heard of people getting
16 audited and the language in the paperwork is so threatening
17 against them that they just don't even bother to fight it
18 because they know they don't have all of their documents
19 together and they just pay in. So -
20 REPRESENTATIVE DUSH: The reason I'm asking that
21 is because one of my concerns is that it sounds like
22 there's so much subjectivity to this -
23 MS. WITMER: Yes.
24 REPRESENTATIVE DUSH: -- and the fact that your
25 accountant had given you advice that you were in compliance 49
1 and you had professionals taking a look at it and telling
2 you that you were in compliance and that you were operating
3 under that belief is something that's concerning to me
4 because if there's no objective standard or that people
5 interpret things in a subjective manner when they're
6 supposed to be objective measurements, that's concerning.
7 MS. WITMER: I agree.
8 MAJORITY CHAIRMAN COX: Thank you, Representative
9 Dush.
10 The reason I made my prior comments is because I,
11 too, like Representative Dush, have heard some of these
12 horror stories. It's one of the reasons I wanted to have
13 the hearing is to show both sides of it. I understand, you
14 know, these gentlemen saying, look, this is what's
15 happening, workers are getting hurt, they have no place to
16 go and all that, but I understand the other side of things.
17 And I'm going to mess up -- the home improvement
18 contractor registration structure that we have in place,
19 that was put in place in large part to protect consumers
20 from what, you know, Bob described in that, you know, if
21 you've got these contractors who -- I have a close friend,
22 they had a roofer come in, roofer did some work, first
23 rainstorm, major leaks, major problems. Apparently this
24 roofer was not a reputable individual. He had since
25 changed the name of his roofing company and was operating 50
1 literally out of the same building, same trucks, just
2 slapped a new magnet on the side that said, you know, I am
3 now such-and-such a roofing company.
4 And so I know there are unscrupulous individuals
5 out there unfortunately, and so we're looking to try to
6 find that balance again.
7 MS. WITMER: Sure.
8 MAJORITY CHAIRMAN COX: You know, when I hear
9 stories of individuals like, you know, you and your husband
10 trying to operate a business, trying to do things right,
11 trying to comply, but I've also heard, you know, horror
12 story after horror story of -- and I mentioned the
13 departments earlier, numerous departments that it's like
14 this, you know, great aha moment where they can slap you
15 with a fine.
16 And I've noticed in a lot of the scenarios it's
17 the smaller entities that seem to be hit the hardest, and
18 there's a part of me that wonders are they being targeted
19 because they have fewer resources to fight it? And I'm
20 just putting it out there. That is the feeling that our
21 small businesses have in this Commonwealth many times.
22 I've heard it. You stated it very well today.
23 But I'm echoing that for people who have sat in
24 my office saying that very same thing. I feel like I'm
25 targeted because I'm not a big company with somebody, you 51
1 know, a lawyer sitting there on retainer waiting to
2 represent me or an accountant, you know, big accounting
3 firm that can represent. You're going day to day. You
4 know, you're doing your best to keep food on your table
5 and, you know, work through your family situation, and you
6 should be a welcome addition to any Commonwealth.
7 And so our goal is not to, again, make it more
8 difficult on you, but we need to find that balance where we
9 can find the unscrupulous contractor, the guy who is doing
10 things improperly, find a way to penalize them without also
11 putting individuals like you and your husband out of
12 business who are trying to comply.
13 I know in other areas -- we've actually got an
14 amendment to a bill that's running tomorrow that has a
15 warning letter required to be sent out saying, listen, you
16 are in violation, and here's how to comply or -- there's
17 got to be something. There's got to be something. As I
18 said earlier, as a parent, I would never say to my kids,
19 you know, you should know the rules, you know?
20 And I think in your testimony you say, you know,
21 you're not here to plead ignorance of the law, but when -
22 especially the second time, you thought you went about
23 covering your bases, getting everything you needed, and
24 then somehow your subcontractor agreements aren't
25 sufficient. Well, who determines that, and is there 52
1 somebody else who looks at them and says, yes, they are
2 sufficient? What's the hearing process, et cetera? So I
3 think that's a lot of what we're missing at this point is
4 what I'll just call a due process problem.
5 So enough of my personal remarks, but I'd like to
6 step over and have questions from Representative Miller
7 this time.
8 REPRESENTATIVE MILLER: Thank you, Mr. Chairman.
9 And I'll be brief. I do go with Representative Neilson's
10 comments, you know, regarding -- you get a lot of
11 information sent to you when you're starting a business,
12 and overwhelmingly, overwhelmingly people want to do things
13 right. That being said, you get a lot of information, and
14 it gets challenging. And we don't want to make it to a
15 situation where the cost of starting it up gets to such a
16 level to where you have those problems.
17 Notification of certain things perhaps needs to
18 be a little sharper, especially when directed to certain
19 sizes of businesses that may not have the infrastructure to
20 process information in place the same way as a larger
21 company.
22 That being said, there are more smaller than
23 larger businesses, and we have to be sure that those
24 smaller businesses are also doing things, as I'm sure the
25 majority of them want to be doing, regardless of their 53
1 intent one way or the other. So I'll leave that alone from
2 Representative Neilson's comments.
3 Mr. Butler, just so I understand, I know I came
4 in late. Two quick questions for you. Misclassification,
5 does it exist in Pennsylvania, and is it a problem from
6 your perspective?
7 MR. BUTLER: Okay. There's two. Are we talking
8 about independent contractor or misclassification of
9 workers? There's two different issues here.
10 REPRESENTATIVE MILLER: Give me your answer to
11 both.
12 MR. BUTLER: Okay. The independent contractor
13 issue, do I think it's out there? Most likely it is. And
14 we do not obviously condone that at all. But I think we
15 need to step back and really look at this because we were
16 actively involved in the bill in 2010. Since then, I have
17 not been notified by my members that this is an issue. If
18 it is an issue that's happening, then let's look at this.
19 As for the, again, misclassification of workers,
20 at a public job that's prevailing wage violations, that's
21 fine. On a private job, I don't see, as we talk about this
22 issue, how can someone come into a private work and claim
23 that that electrician's not doing their job? They should
24 be being paid someone else's rate.
25 REPRESENTATIVE MILLER: Okay. 54
1 MR. BUTLER: I don't understand how that's
2 possible.
3 REPRESENTATIVE MILLER: So just so I got it, so
4 misclassification on that sector you say no, on your
5 original one in relation to the independent contractors you
6 say yes?
7 MR. BUTLER: Yes.
8 REPRESENTATIVE MILLER: Okay. And in relation -
9 I know you spoke in favor of 716 if I got my notes correct.
10 Are you in favor of any of the five bills that are the
11 subject of this hearing today?
12 MR. BUTLER: Looking through the bills, going
13 through it, I did talk to members, staff of the Committee.
14 We thought it was best to really -- instead of looking at
15 all of those individually, let's just step back and really
16 examine the issue as a whole with experts, both union,
17 nonunion, small, large, construction experts, bring in the
18 Attorney General, bring in L&I and really look at this
19 because I don't want to look at every individual one yet
20 because there are so many small nuances.
21 REPRESENTATIVE MILLER: And that goes to why you
22 support 716?
23 MR. BUTLER: Yes.
24 REPRESENTATIVE MILLER: So I got it. So is it
25 safe for me at least to say on the five bills today you 55
1 have no position as to these bills today?
2 MR. BUTLER: At this time, no, I do not.
3 REPRESENTATIVE MILLER: Okay. All right. Thank
4 you.
5 Drew or Bob, real quick, Drew, licensing,
6 licensing, so obviously one of the things that there was a
7 debate a little bit here was regarding whether or not the
8 penalties would be effective, licensing. So some people
9 may have questions on some criminal -- what is effective to
10 one may not be effective to another. You know, a $200
11 penalty to somebody is a big issue depending on the person
12 and to others it's like, you know, they didn't even notice,
13 right?
14 MR. SIMPSON: Right.
15 REPRESENTATIVE MILLER: So licensing, though,
16 just like certifications, licensing is a way that you
17 either have it or you don't. And so I wonder if in
18 relation to misclassification, the issues here that bring
19 us today, any thoughts regarding a licensing aspect to how
20 to more effectively police this issue?
21 MR. SIMPSON: Well, obviously, I think licensing
22 of contractors would be good and all, and I believe even
23 the electricians are a little more strict with their
24 licensings. I believe statewide they have to be licensed.
25 Obviously, the more licensing you have, I mean, the more we 56
1 know who these contractors are.
2 The contractors that we're talking about, a lot
3 of them that we're talking about today come in from out of
4 state. You know, these labor brokers, as we've been
5 talking about recently, they're coming in from out of
6 state, and they're subbing to a sub, so the subcontractor,
7 you have a general contractor, he subs the work, interior
8 systems to a subcontractor. That subcontractor is subbing
9 the work legally or illegally to a labor broker. That
10 labor broker is coming to town, and I can tell you right
11 now of a project where there's 50, 5-0 carpenters that are
12 working on that jobsite that are not paying taxes. They're
13 either being paid cash out of a briefcase or they're being
14 paid by check with no deductions on it, no stub, they fill
15 out no paperwork in the processing into the project.
16 So while, yes, licensings would be great, you
17 know, how many levels do you license? Do you license the
18 general contractor, the construction manager, the
19 subcontractors? You could get into a whole bunch of
20 licensings that, you know, maybe an overburden to the
21 system.
22 REPRESENTATIVE MILLER: Thank you, Brother, but
23 real quick, just a quick follow-up, is there a State that
24 does have a licensing schematic that you believe is helpful
25 to addressing these issues? 57
1 MR. SIMPSON: I do not know that off the top of
2 my head.
3 REPRESENTATIVE MILLER: Okay.
4 MR. SIMPSON: I will be able to get that
5 information for you, though.
6 REPRESENTATIVE MILLER: All right. Thank you for
7 the questions and answers. I do appreciate everything.
8 And thank you, Mr. Chairman, for the time.
9 REPRESENTATIVE MACKENZIE: Thank you,
10 Representative Miller. I'm going to be stepping in for the
11 Chairman. He had to take a tour of school students, which
12 is where I was also earlier in this meeting. It's a busy
13 day here in the Capitol because we have lots of guests
14 here.
15 Next up is Representative Schemel.
16 REPRESENTATIVE SCHEMEL: Thank you very much.
17 So some of what I'm hearing about are what I
18 would characterize as may be large offenders. And we see
19 sort of the disparate impact it has on small contractors.
20 And recommendations are only really to increase the
21 penalties, either increasing them to a point where a small
22 contractor would simply not be able to weather a storm if
23 they made mistakes in their paperwork or even criminalizing
24 them.
25 So I'm wondering, leaving aside the legal issues 58
1 -- and I recognize there might be some -- what about a
2 graduated scale where, you know, either based upon the
3 number of employees or the number of workers or the size of
4 the job perhaps to be prevented from being cut down into so
5 many small workers, that we have penalties based upon -
6 you know, that are on a graduated scale so as to maybe get
7 some of the large offenders without having this disparate
8 impact that we heard a little bit about from Mrs. Witmer?
9 MR. BAIR: As I said before, I think that's a
10 novel approach, and I think that's actually the right
11 approach. You don't want to see somebody that's
12 legitimately trying to do their business get hurt in this.
13 They're not there to break the rules. There's a big
14 disconnect coming from the business side. When I had the
15 opportunity to work in the shops and in the offices, it's
16 one thing when you're working for a company that's doing
17 $60-70 million worth of work a year. I have accountants
18 that are construction accountants. I had attorneys that
19 would walk us through U.C., okay, all your taxes, filing
20 them biweekly, right, that small contractors don't have.
21 And you don't want to see a legitimate small
22 contractor get hurt. That's not at all what this is about.
23 This is about the people that are blatantly, continuously
24 breaking the rules, listing people as independent
25 contractors at the expense of the employees. 59
1 Anything we do -- and I will agree with Mr.
2 Butler. We need to take a look at this and say how can we
3 protect employees? How can we protect the honest
4 contractors, right? And how do we weed out the
5 unscrupulous contractors that, as Mr. Simpson said, come in
6 here with 50 people that are paying zero into the State of
7 Pennsylvania, they're not paying into unemployment, they're
8 not paying their taxes, they're not being a good corporate
9 citizen. I don't care what State they're from. They're
10 not being a good corporate citizen, okay?
11 So anything we do that can be an enhancement of
12 the system -- we love our small businesses in Pennsylvania.
13 As a business manager of IBEW 143, I have 17 signatory
14 contractors that employ less than five people. They're
15 good, viable businesses, okay? We love our small
16 contractors. It's not that we want to hurt anybody; it's
17 not that we want to drive anybody out of business. What we
18 want to do is we want to give all these small contractors
19 an opportunity to bid on a level playing field, though,
20 also, okay?
21 My guys can't bid on a job if I know I have an
22 unscrupulous set of State contractors getting five
23 electricians from a labor broker, paying $16 an hour with
24 no benefits. And they're going to be here for six, eight
25 weeks and they're gone. And it doesn't matter if it's a 60
1 private money job or a prevailing wage job. You can't
2 compete. As an honest contractor, you're at a
3 disadvantage, okay?
4 And at the end of the day if you're working for
5 an honest contractor -- I'm sure her and her husband pay
6 their taxes, okay, just like every one of my guys that gets
7 his paycheck, his employer pays his taxes. And they get
8 paid in and they're collected, and that's really what this
9 is about. It's about making sure that the employees are
10 taken care of. It's about making sure that the
11 Commonwealth is collecting what is owed, and it's not about
12 trying to drive a small business such as hers out. That's
13 not at all what any part of this should be. This is about
14 saying let's do some commonsense legislation, and let's
15 clean up a big problem that we've really stuck our head in
16 the sand over the last 15 years about. Is that -
17 REPRESENTATIVE MILLER: Yes, maybe. I'm just
18 trying to thread the needle of what maybe gets at some of
19 the worst offenders, which are really why this is here
20 before us, not because of people like the Witmers.
21 MR. BAIR: Absolutely.
22 REPRESENTATIVE MILLER: Without having that, you
23 know, significantly punitive effect on those. I mean, I
24 know a lot of small contractors that don't even bid on
25 prevailing wage jobs because compliance is too much of a 61
1 burden, so I don't want to do anything in government that
2 makes compliance more of a burden, more risky on our small
3 businesses. And that would be a concern I have over the
4 legislation the way it's drafted. I'm not as familiar with
5 it yet, though, as I should be, but perhaps a way to bridge
6 that gap would be to make a graduated scale so as to get
7 the bigger offenders. Because you said they don't care, so
8 let's quadruple the penalty. They don't care, they'll pay
9 it. Well, the Witmers won't.
10 MR. BAIR: Right.
11 REPRESENTATIVE MILLER: That, you know, would
12 simply end their business. So, you know, that might be an
13 option. I have to look at it. But thanks.
14 MS. WITMER: May I comment?
15 REPRESENTATIVE MILLER: Sure.
16 MS. WITMER: I think, too, we have a whole page
17 worth of recommendations in regards to what we went
18 through, but I think, too, I agree that there is no
19 comparable playing field between a small contractor such as
20 my husband versus a large commercial labor union type of
21 drywall outfit. My husband's bidding on additions on
22 homes, basements, you know, remodeled bathrooms, new
23 construction such as a custom homebuilder. You're not
24 going to find him bidding on a large commercial job.
25 And so I think the end result should be there 62
1 needs to be two separate criteria altogether for auditing
2 if you're talking about the auditing investigative process.
3 A small contractor, it should be laid out as to who is
4 deemed a small contractor I think in reference to maybe
5 sales or volume or how many employees, which is mentioned,
6 versus a large outfit such as if they're working on
7 commercial jobs or if they have project managers and if
8 they have, you know, a significantly larger sales volume.
9 REPRESENTATIVE MILLER: Yes. I mean, one
10 challenge is that, you know, you can see an unscrupulous
11 outfit breaking it down to say, well, we are, we're 50
12 small contractors, and therefore, we don't have to comply
13 with the bigger rules or have the bigger penalties. That's
14 why, you know, as you say, your husband is not going to be
15 bidding on a project that is, you know, a large public
16 building. You know, maybe if we had a graduated scale
17 based upon size, the cumulative size of the project or
18 something, I don't know, but -
19 MR. SIMPSON: Representative, if I could add
20 something here, I just wanted to say that we are not here
21 to pick on the residential contractors. I commend the
22 Witmers. I commend Mr. Witmer. I've hung a lot of drywall
23 in my life, and the shoulders don't work the way they used
24 to and the knees and the back certainly don't work the way
25 they used to. And here's a hardworking gentleman trying to 63
1 survive, trying to make for his family.
2 We are not here to beat up on the small
3 residential contractors. As we stated and I think
4 everybody sort of understands, it's the larger -- and this
5 is not a union/nonunion thing. I will disagree with
6 Representative Neilson now that he's left that this is not
7 a union/nonunion issue. This is against unscrupulous
8 contractors or legitimate contractors against unscrupulous
9 contractors. And again, we don't want to beat up on the
10 residential. We're talking the major commercial
11 contractors that are out there that are breaking these
12 laws, knowingly breaking these laws.
13 I feel bad for the Witmers who, you know,
14 information may not have been gotten to them, and I feel
15 bad for them for that.
16 The general contractors that we're dealing with,
17 the subcontractors that deal with these general contractors
18 and construction managers, they know the laws, and they
19 know they're blatantly breaking them, so those are the
20 people that our discussions are about today.
21 REPRESENTATIVE MILLER: Yes.
22 MS. WITMER: May I comment again? I'm sorry.
23 I'm sorry. I just want to say that we are in agreement
24 that there are a lot of things happening in the
25 construction world that my husband, he has seen it also 64
1 from the smaller business level that there are things that
2 aren't being done, you know, legally, and he doesn't want
3 to see that either. Obviously, those people bid against
4 him, you know, so that's why I agree, like we both agree
5 that, you know, people should be complying with whatever
6 legislation is supposed to keep them in check, but
7 ultimately, I think there needs to be separate criteria
8 because we couldn't afford the penalties and fines or to be
9 labeled a criminal, you know, because the first time we
10 were out of compliance without a warning or anything.
11 Thank you.
12 REPRESENTATIVE MACKENZIE: All right. Thank you.
13 And the final person that we have on the list is
14 Representative Dush for a second time.
15 REPRESENTATIVE DUSH: Thank you, Chairman.
16 Drew, I just have a follow-up to your testimony
17 about a location you're aware of that has 50 employees
18 being brought in, paid cash. And my question to you is has
19 the Department of Labor been notified, number one? And
20 what kind of a follow-through has there been? I'm very
21 interested in -- we need to get that tax revenue to us.
22 MR. SIMPSON: Sure. What I can say on it is the
23 appropriate authorities have been notified of the issue,
24 and the appropriate authorities are investigating the
25 issue. Where it goes from there I do not know, but the 65
1 appropriate authorities have been notified of the issue.
2 REPRESENTATIVE DUSH: In your experience has
3 there been fairly successful follow-through in most cases
4 where you guys identify that kind of stuff?
5 MR. SIMPSON: It's sort of regionalized. I'm the
6 regional manager for the whole State of Pennsylvania, and
7 there are areas, district offices that are, you know, very
8 good at, you know, following up and, again, we don't really
9 -- until we see the reports come out at the end of the year
10 as to who has been fined. There are other areas that lack
11 a little bit, you know, in -
12 REPRESENTATIVE DUSH: What areas are the better
13 served, and which areas are -
14 MR. SIMPSON: I know the central Pennsylvania -
15 their regional office does a very good job in following up
16 on complaints made from the jobsites and things like that.
17 You know, western Pennsylvania I think does a fairly good
18 job, too. I can't speak for all the other areas, but, you
19 know, they -- and again, that's not a -- labor and industry
20 and one of the issues with the Department of Labor and
21 Industry is -
22 MR. BAIR: Access to the jobsite.
23 MR. SIMPSON: Access to the jobsite is number
24 one. The investigators to do their jobs because of, you
25 know, budget restraints or whatever else. I mean, if we 66
1 could -
2 MS. BERRIER: Can I chime in?
3 MR. BAIR: Yes.
4 MR. SIMPSON: Yes, yes.
5 MS. BERRIER: Yes. We had -
6 MR. SIMPSON: Please.
7 MS. BERRIER: We have 3 0 labor law investigators
8 statewide, and they do 12 labor laws, so our resources are
9 stretched very thin, but our people are passionate about
10 what they do, and they maximize the resources that we have,
11 so I have to give kudos to them.
12 REPRESENTATIVE DUSH: Thank you.
13 MR. SIMPSON: And just to follow up, I mean, I
14 will agree. I mean, whenever we have meetings with the
15 Department of Labor and Industry, they're always very
16 helpful. Again, I mean, if they had a couple hundred
17 investigators, that would probably make their lives an
18 awful lot easier with everything they have on their plate
19 to investigate. And I really just think it's more of a
20 time management issue and the lack of having enough
21 investigators to handle the requests.
22 REPRESENTATIVE DUSH: Thank you.
23 MR. BAIR: Well, when you think about how many
24 construction jobs are happening right now in Pennsylvania,
25 hundreds of thousands as we sit here and speak, and we 67
1 have -
2 MS. BERRIER: Thirty.
3 MR. BAIR: Thirty.
4 MS. BERRIER: Thirty investigators, yes.
5 REPRESENTATIVE DUSH: Thank you.
6 MS. BERRIER: Thank you.
7 REPRESENTATIVE MACKENZIE: Great. Well, thank
8 you, everyone. And I appreciate the testimony that
9 everybody provided. I think it was very informative and
10 helpfully provided some new ideas that might help address
11 some of the issues that we talked about and do it in an
12 appropriate way that goes after those bad actors but also
13 makes it easier to comply for the small folks out there
14 that are just trying to do the right thing.
15 With that, I'll turn it over to the Chairman for
16 closing remarks.
17 MAJORITY CHAIRMAN COX: I thank you for taking
18 over in my brief absence.
19 I, too, would like to once again thank all the
20 testifiers for being here. I would also encourage any
21 other stakeholders who are watching this hearing, others
22 like Mrs. Witmer and similarly situated businesses and so
23 forth reach out to us. Let us know, give us your stories,
24 let us know how we can potentially craft something that
25 makes a change that prevents a type of thing from happening 68
1 in the future and ways that we can work together to make
2 sure our workforce is protected but that we're also making
3 sure that our businesses are able to stay strong and grow
4 and do what we all want them to do, which is succeed. So
5 thank you again.
6 Representative Harkins, do you have any closing
7 comments?
8 DEMOCRATIC CHAIRMAN HARKINS: No, thank you.
9 MAJORITY CHAIRMAN COX: All right. Well, again,
10 thank you, and safe travels home.
11
12 (The hearing concluded at 12:30 p.m.) 69
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