The Construction Workplace Misclassification Act took effect last year in Pennsylvania. This law makes it illegal in Pennsylvania to classify commercial and residential construction employees as independent contractors.
The Act also significantly narrowed the definition of “independent contractor” which will now require (1) a written contract to perform construction services with the business or person; (2) the individual is free from control or direction over the performance of such services; and (3) the individual is customarily engaged in an independently established trade, occupation, profession or business.
The Act also addressed the definition of the phrase “customarily engaged in an independently established trade, occupation, profession or business” which will be found if:
(1) The individual possesses the essential tools, equipment and other assets necessary to perform the services independent of the person for whom the services are performed.
(2) The individual’s arrangement with the person for whom the services are performed is such that the individual shall realize a profit or suffer a loss as a result of performing the services.
(3) The individual performs the services through a business in which the individual has a proprietary interest.
(4) The individual maintains a business location that is separate from the location of the person for whom the services are being performed.
(5) The individual: (i) previously performed the same or similar services for another person in accordance with paragraphs (1), (2), (3) and (4) while free from direction or control over performance of the services, both under the contract of service and in fact; or (ii) holds himself out to other persons as available and able, and in fact is available and able, to perform the same or similar services in accordance with paragraphs (1), (2), (3) and (4) while free from direction or control over performance of the services.
(6) The individual maintains liability insurance during the term of this contract of at least $50,000.
Violations of the Act in knowingly misclassifying an employee as an independent contractor subject the employer to monetary and criminal penalties.
If you’ve suffered a work injury and have questions about your claim, contact me at firstname.lastname@example.org or call (570) 347-1011 for a free consultation.