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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted:	June 3, 2019 10:45 AM
From:	Representative Patrick J. Harkins and Rep. Gene DiGirolamo
To:	All House members
Subject:	Improving the Construction Workplace Misclassification Act

The Construction Workplace Misclassification Act (Act 72 of 2010) provides an important deterrent to misclassification in the construction industry. Since 2015, the Department of Labor and Industry has increased its enforcement efforts and recovered over $1.6 million in penalties from 700 contractors. Last year alone, it completed over 400 on-site investigations. Concerns remain, however. Contractors continue to misclassify employees as independent contractors, undercutting competitors that play by the rules; avoiding taxes; and robbing workers and their families of fair wages, benefits, and access to public safety net programs. In response to these concerns, we have been working with the Department of Labor and Industry to identify methods that will improve enforcement of Act 72. Our legislation would do the following: Increase fines for violations and add debarment as a penalty. Penalties should be meaningful and serve as an effective deterrent. Enable the Department to execute stop work orders for violations immediately. Act 72 unnecessarily limits the use of stop work orders. This change would bring Act 72 in line with other Department regulations. Provide the department the authority to investigate worksites and review employer records. Unlike other labor laws, Act 72 does not provide the department with clear authority to investigate complaints, including entering and inspecting worksites or compelling the production of records. Currently, the department has little recourse if employers fail to respond to requests for information. Require general contractors to take more responsibility for subcontractors who misclassify their workers. Act 72 requires penalties to be applied to parties who knowingly contract with a subcontractor who misclassifies workers; however, this section must be clarified for greater effectiveness. Pennsylvania’s construction workers deserve better. We hope you will join us in sponsoring this important legislation.

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