For years contractors have taken advantage of workers by declaring them for tax purposes as "independent contractors" and giving them a 1099 tax form. By doing this contractors could evade unemployment tax as well workmans comp tax, the only benefit was to the contractor. The workers he declared as independent contractors could not collect unemployment nor could they get workmans comp pay if they were to get hurt. The state of Pennsylvania enacted Act 72 to deal with unscrupulous contractors that would use this practice. It is now illegal to be 1099'ed if you are not a legitimate business owner with a legitimate contract to perform work. Here's a link to the Pennsylvania Department of Labor detailing the law and supplying complaint forms should someone try to declare you as an independent contractor.

 

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