House passes Delloso bill to crack down on employer fraud
Rep. David M. Delloso June 11, 2025
HARRISBURG, June 11 – The PA House voted today in a bipartisan effort (108-95) to pass a bill that would help guarantee workers in Pennsylvania receive the workplace benefits and protections they’ve rightly earned. Sponsored by state Rep. David M. Delloso, D-Delaware, the legislation would crack down on employers who commit fraud by purposefully misclassifying their employees – a move that would also save taxpayers millions of dollars.
Delloso first introduced the measure during the 2023-24 legislative session to follow up on a recommendation from the Joint Task Force on Misclassification of Employees. Act 85 of 2020 had ordered the Department of Labor & Industry to form the task force to study and compile a report on the practice of employers misclassifying workers as “independent contractors” in order to rob their employees of the protections and benefits owed to them.
The task force delivered that report in March of 2022 – including 15 recommendations to the General Assembly on how to tackle the problem. Among them was to create an interagency working group to take on the duty of overseeing the actions they proposed.
H.B. 276 would follow through on that recommendation by establishing the Employee Misclassification Working Group to coordinate enforcement strategies involving state agencies. It would also authorize the Department of Labor & Industry and Department of Revenue to share data to better investigate employee misclassification – and to aid in that process, would require state agency business applications to include and use a federal employer ID number to ensure the efficient exchange of state tax information.
Delloso pointed out that misclassification doesn’t only harm the employees directly impacted – it forces more money out of taxpayers and responsible employers to make up for the lost state revenue.
“Every year, more than a quarter million Pennsylvanians put in the hours at work, do their jobs right, and still get shorted on the pay and benefits they’ve earned. That’s theft, and some employers are banking on the fact that nobody’s holding them accountable for it,” Delloso said. “We have no excuse to not act to stop it. We have the proof and we have the solution, so now it’s up to us as state lawmakers to stand up for workers and quickly get this legislation to Governor Shapiros’ desk.”
Statistics compiled by the task force that illustrate the severity of the problem include*:
- 5.3: Average number of misclassified employees found per employer.
- 48,939: Annual number of employers who currently misclassify at least one employee.
- 259,000: Annual number of misclassified employees in Pennsylvania.
- 10,892: Estimated number of misclassified employees who suffered injury or illness at work and were denied workers’ compensation in 2021.
- $6.4 million to $124.5 million: Estimated annual range of lost revenue to the state’s General Fund due to misclassification.
- $153,365,895: Estimated losses to misclassified employees who suffered injury or illness at work in 2021 without workers’ compensation insurance.
*Source: Office of Unemployment Compensation Tax Services audit based on data collected from 2020Q3-2022Q2.
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