Pennsylvania House Passes Construction Industry Independent Contractor Act

Sheldon Sandler reported earlier this week about a law passed by the Delaware House that would criminalize employment laws.  Pennsylvania has passed a law nearly identical to the Delaware bill.  In case you missed Sheldon’s post, here’s a recap that includes the details of the laws of both states.

Like Delaware, Pennsylvania’s version of the Construction Industry Independent Contractor Act proposes to penalizes employers in the commercial or residential building construction industry for intentionally evading certain state employment laws, such as the Minimum Wage Act, the Wage Payment and Collection Law, the Unemployment Compensation Law, and the Workers’ Compensation Act.

The law sanctions both intentional and negligent misclassifications of workers. An employer that intentionally misclassifies an employee will be charged with a third-degree felony and could face a fine of up to $15,000, imprisonment of up to three and a half years, or both, for a first offense.  Subsequent convictions could result in fines of up to $30,000,  imprisonment of up to seven years, or both.

Negligent misclassification carries penalties of up to $1,000 per offense, and possible administrative fines.

The Attorney General may also issue a stop-work order, which requires the employer to cease all business operations until Pennsylvania’s Secretary of Labor and Industry lifts the order or the employee is properly ­classified. In addition, the employer may be subject to a civil action for damages brought by an employee, or the employee’s union, claiming improper classification.

The Act also  includes an anti-retaliation provision.

If the bill succeeds with the Pennsylvania Senate and is signed (as is expected) by Governor Rendell, the legislation could become effective as early as January 1, 2009.