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PRINTER'S NO. 1682
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1549
Session of
2021
INTRODUCED BY HARKINS, ISAACSON, SCHLOSSBERG, FREEMAN, DELLOSO,
SANCHEZ, GALLOWAY, PISCIOTTANO, SONNEY, A. DAVIS, CIRESI,
GUZMAN, NEILSON AND WARREN, JUNE 7, 2021
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, JUNE 7, 2021
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,
for administrative penalties, for stop-work orders, for
certain agreement prohibited and for use of penalty funds.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 4(e) of the act of October 13, 2010
(P.L.506, No.72), known as the Construction Workplace
Misclassification Act, is amended and the section is amended by
adding a subsection to read:
Section 4. Improper classification of employees.
* * *
(c.1) Investigations.--If the secretary receives information
indicating that a person has violated this act, the secretary
may investigate the matter. The secretary may:
(1) investigate and ascertain wages paid to an employee;
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(2) enter and inspect a worksite or place of business at
any reasonable time to examine and inspect records and
conditions of employment that are necessary and appropriate
to the enforcement of this act;
(3) copy or compel the production of records, contracts
and other documents that are necessary and appropriate to the
enforcement of this act; and
(4) require statements from the employer or individuals
present at a worksite, in person or in writing.
* * *
(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.] A
general contractor or any other party that does not meet the
definition of "employer" in section 2 and that contracts with an
employer who misclassifies employees in violation of this act
may be subject to the same penalties, remedies or other actions
as the employer found to be in violation of this act.
* * *
Section 2. Sections 6, 7, 9(b) and 12 of the act are amended
to read:
Section 6. Administrative penalties.
(a) General rule.--When the secretary finds that a person
has violated this act, the secretary may assess and collect
civil penalties of not more than [$1,000] $2,500 for the first
violation, and not more than [$2,500] $5,000 for each subsequent
violation.
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(b) Factors to be considered.--When determining the amount
of the penalty to be imposed, the secretary shall consider
factors including, but not limited to:
(1) The history of previous violations by the employer.
(2) The seriousness of the violation.
(3) The good faith of the employer.
(4) The size of the employer's business.
(c) Debarment.--In the event that the secretary determines,
after notice and hearing as required under this act, that a
person has intentionally violated this act, the secretary shall
notify all public bodies of the names of those persons. No
public body may award a contract to the person or to a business,
corporation or partnership in which the person has an interest
until three years have elapsed from the date of the notice to
the public bodies.
Section 7. Stop-work orders.
(a) Issuance of order.--
[(1) If the secretary determines, subsequent to the
issuance of an order to show cause under section 4(c), that
an employer, or officer or agent of the employer, has
intentionally failed to properly classify an individual as an
employee under section 4(a), the secretary may petition a
court of competent jurisdiction to issue a stop-work order
requiring the cessation of work by individuals who are
improperly classified within 24 hours of the effective date
of the order, or in the event that a majority of individuals
working at a site are improperly classified, requiring the
cessation of all business operations of that employer at each
site at which a violation occurred within 24 hours of the
effective date of the order.
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(2) The order shall take effect when served upon the
employer, or for a particular employer worksite, when served
at the worksite. The order shall remain in effect until the
court issues an order releasing the stop-work order or upon
finding that the employer, or officer or agent of the
employer, is no longer in violation of this act.
(3) An order releasing a stop-work order may include a
requirement that the employer file with the department
periodic reports for a probationary period that shall not
exceed two years demonstrating the employer's continued
compliance with this act.
(b) Applicability of orders and penalties.--Stop-work orders
under subsection (a) and penalties under subsection (c) shall be
in effect against any successor corporation or business entity
that has one or more of the same principals or officers as the
employer against whom the stop-work order was issued or
penalties imposed and which is engaged in the same or equivalent
trade or activity.] If the department determines that that an
employer, or officer or agent of the employer, has intentionally
failed to properly classify an individual as an employee under
section 4(a), the department may issue an order requiring the
cessation of construction. The following applies to the stop-
work order:
(1) The order may require satisfaction of conditions
necessary to ensure that the employer complies with this act.
(2) The order shall take effect when served upon the
employer by first class mail or posting at the employer's
worksite.
(3) The order shall remain in effect until released by
the department or a court of competent jurisdiction.
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(4) The order shall be effective against a successor
entity that:
(i) has one or more of the same principals or
officers as the employer against whom the order was
issued; and
(ii) is engaged in construction.
(5) An order releasing a stop-work order may include a
requirement that the employer file with the department periodic
reports for a probationary period that may not exceed two years
demonstrating the employer's continued compliance with this act.
(c) Penalty.--The court shall assess a penalty of [$1,000]
$2,500 per day against an employer for each day that the
employer conducts business operations that are in violation of a
stop-work order issued under this section.
Section 9. Certain agreement prohibited.
* * *
(b) Penalty.--A violation of subsection (a) shall be
punishable by an administrative fine of not less than [$1,000]
$2,500 and not more than [$2,500] $5,000. Each violation shall
be considered a separate offense under this section.
Section 12. Use of penalty funds.
Any sum collected as a penalty under:
(1) Sections 6, 7 and 9 for a violation of section 4(a)
(1) shall be [paid into] divided equally between the Workers'
Compensation Administration Fund and the department for costs
related to enforcement.
(2) Sections 6, 7 and 9 for a violation of section 4(a)
(2) shall be [paid into] divided equally between the Special
Administration Fund created under section 601.1 of the
Unemployment Compensation Law and the department for costs
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related to enforcement.
(3) Section 9 for a violation of any other provision of
this act shall be divided equally between the Workers'
Compensation Administration Fund [and], the Special
Administration Fund and the department for costs related to
enforcement.
Section 3. This act shall take effect in 60 days.
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