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PRINTER'S NO. 1829
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1436
Session of
2017
INTRODUCED BY CALTAGIRONE, MILLARD, SCHLOSSBERG, PASHINSKI AND
DeLUCA, MAY 24, 2017
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, MAY 24, 2017
AN ACT
Amending the act of October 13, 2010 (P.L.506, No.72), entitled
"An act providing for the criteria for independent
contractors in the construction industry and for the powers
and duties of the Department of Labor and Industry and the
Secretary of Labor and Industry; and imposing penalties,"
further providing for improper classification of employees
and for criminal penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 4 and 5 of the act of October 13, 2010
(P.L.506, No.72), known as the Construction Workplace
Misclassification Act, are amended to read:
Section 4. Improper classification of employees.
(a) Violation.--An employer, or officer or agent of an
employer, shall be in violation of this act and shall be subject
to the penalties, remedies and actions contained in this act if
the employer, officer or agent:
(1) fails to properly classify an individual as an
employee for purposes of the Workers' Compensation Act and
fails to provide the coverage required under the Workers'
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Compensation Act; [or]
(2) fails to properly classify an individual as an
employee for purposes of the Unemployment Compensation Law
and fails to pay contributions, reimbursements or other
amounts required to be paid under the Unemployment
Compensation Law[.]; or
(3) is convicted of an offense under 18 Pa.C.S. ยง 4107
(relating to deceptive or fraudulent business practices)
reasonably related to a violation under paragraph (1) or (2).
(b) Separate offenses.--Each individual who is not properly
classified as an employee shall be the basis of a separate
violation of this section.
(c) Order to show cause.--
(1) If the secretary receives information indicating
that any person has violated this act, the secretary may
investigate the matter and issue an order to show cause why
the person should not be found in violation of this act.
(2) A person served with an order to show cause shall
have a period of 20 days from the date the order is served to
file an answer in writing.
(3) If the person fails to file a timely and adequate
answer to the order to show cause, the secretary may,
following notice and hearing, do any of the following:
(i) petition a court of competent jurisdiction to
issue a stop-work order as provided in section 7; or
(ii) immediately assess penalties as provided in
section 6.
(d) Enforcement.--If, subsequent to issuing an order to show
cause under subsection (c), the secretary finds probable cause
that an employer has committed a criminal violation of this act,
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the secretary shall refer the matter to the Office of Attorney
General for investigation or impose administrative penalties
under section 6.
(e) Acting in concert with other parties.--A party that does
not meet the definition of "employer" in section 2, but which
intentionally contracts with an employer knowing the employer
intends to misclassify employees in violation of this act, shall
be subject to the same penalties, remedies or other actions as
the employer found to be in violation of this act.
(f) Defense.--It shall be a defense to an alleged violation
of this section if the person for whom the services are
performed in good faith believed that the individual who
performed the services qualified as an independent contractor at
the time the services were performed.
Section 5. Criminal penalties.
(a) Grading.--An employer, or officer or agent of an
employer, that intentionally violates section 4(a)(1) or (2)
commits:
(1) A misdemeanor of the [third] second degree for a
first offense.
(2) A misdemeanor of the [second] first degree for a
second or subsequent offense.
[(b) Summary offense.--An employer, or officer or agent of
an employer, that negligently fails to properly classify an
individual as an employee under section 4(a) commits a summary
offense and shall, upon conviction, be sentenced to pay a fine
of not more than $1,000. Evidence of a prior conviction under
this subsection shall be admissible as evidence of intent under
subsection (a).]
(b.1) Debarment.--A person sentenced under subsection (a)
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shall be prohibited from contracting with or in any manner doing
business with the Commonwealth for a period of five years.
(c) Concurrent jurisdiction.--
(1) The Attorney General shall have concurrent
prosecutorial jurisdiction with the district attorney of the
appropriate county for violations under this section and any
offense arising out of the activity prohibited by this
section.
(2) No person charged with a violation of this section
by the Attorney General shall have standing to challenge the
authority of the Attorney General to prosecute the case, and
if a challenge is made, the challenge shall be dismissed, and
no relief shall be available in the courts of this
Commonwealth to the person making the challenge.
Section 2. This act shall apply to offenses committed and
sentences imposed on and after the effective date of this
section.
Section 3. This act shall take effect in 60 days.
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