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Home ACA Compliance Guess Which State Is Taking A Step Toward Correcting Employee Misclassifications?

Guess Which State Is Taking A Step Toward Correcting Employee Misclassifications?

2 minute read
by Robert Sheen

Since 2015, the topic of employee misclassification has been a hot one. Thank companies like Dave & Busters—who came under fire for allegedly doctoring hours to fall below the ACA’s hourly requirement for health care or Uber’s ongoing battles with drivers clocking in “full-time” shifts —there is a nationwide move towards more accurate employee classification.

We’ve learned it’s also a problem overseas, but here Stateside, as the use of “contract” workers become increasingly common, the specter of such workers being employees in reality demand the need for better work standards for such workers. Add Pennsylvania to the existing list of states ready to achieve that mission.

At the close last month, the state in conjunction with the Department of Labor signed a Memorandum of Understanding (MOU) , which aims to prevent the state from further employee misclassification situations as well as both state and federal investigations of previous and currently existing ones. This three-year MOU arrives on the heels of Pennsylvania announcing a campaign that will start this Fall to bring a public awareness to employee misclassifications.

On December 1, 2016, a new set of overtime threshold regulations will come into place, and while they may provide more structure to prevent further misclassifications, Pennsylvania employers may not be entirely pleased. This is certainly a situation where all Pennsylvania-based companies, especially those with independent contractors, should keep their antennas up for potential misclassification issues.

However, Pennsylvania isn’t alone. The state makes #32 in the list of existing states with MOUs, including: Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New Mexico, New York, Oregon, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.

In 2015, moves such as these garnered over $74 million in back wages to more than 102,000 workers. As more states enter into MOUs, fewer misclassifications will hopefully occur in the future. To view Pennsylvania’s full Memorandum of Understanding, click here.

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