Delaware County DA is charging a contractor with misclassifying its workers

Delaware County District Attorney Jack Stollsteimer has filed criminal charges against a York County construction company for allegedly misclassifying its workers on a Delaware County project, officials announced Monday.

The case against G&R Drywall and Framing is a striking move on the part of Stollsteimer and his office, which worked with Pennsylvania Attorney General Josh Shapiro’s labor-focused prosecutors to develop the case. Since 2011, when Pennsylvania’s Construction Workplace Misclassification Act went into effect, it’s been illegal to misclassify construction industry workers, but Stollsteimer’s office says this is the time criminal charges have been filed for such an offense.

It’s a reflection of how local prosecutors are increasingly cracking down on employers who mistreat workers.

“The lack of enforcement of this statute really ends today,” Stollsteimer said, adding that he wanted to send a message to contractors that “you can’t rip off your employees and get away with it.”

Worker misclassification — when employers attempt to cut costs and avoid responsibility for worker protections by treating workers as independent contractors instead of employees — is common in the construction industry. Employees have legal rights, such as worker’s compensation and the right to be paid minimum wage; independent contractors do not.

In Philadelphia, workers who are either undocumented or misclassified as independent contractors make up 15% to 25% of the local construction industry, according to estimates in a 2018 report from the Office of the City Controller.

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But worker misclassification has recently become a hot topic because of how app companies such as Uber and Lyft treat their workers. In California, Uber, Lyft, and other gig companies spent more than $200 million backing a ballot measure called Proposition 22 to override a state law that required them to classify their workers as employees instead of independent contractors.

Stollsteimer said he’d need a state law to prosecute app companies for misclassifying their workers — the Construction Workplace Misclassification Act is focused only on the construction industry — but if the legislature passed one, “we certainly would be interested.”

In October 2019, State Rep. Danilo Burgos (D., Phila.) introduced a bill to classify app-based workers as employees, but it didn’t go anywhere. It must be reintroduced in this year’s legislative session to be considered again.

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The worker misclassification case brought by Stollsteimer and Shapiro is part of a broader trend of prosecutors using their powers to protect workers’ rights.

In 2019, Philadelphia District Attorney Larry Krasner hired a lawyer to focus on crimes against workers. The office’s economic crimes unit is now in the final stage of an investigation of a contractor, Krasner spokesperson Jane Roh said. Shapiro is one of several state attorneys general who has prioritized holding employers accountable for their treatment of workers.

Stollsteimer said his office’s economic crimes arm has generally focused on white-collar crime, but will now also focus on crimes against workers.

“We’re policing the beats we usually police,” he said. “We’ve now added this beat.”