Regular Session 2021-2022 Senate Bill 1056 P.N. 1397

PRINTER'S NO. 1397

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1056

Session of

2022

INTRODUCED BY KANE, TARTAGLIONE, L. WILLIAMS, HUGHES, HAYWOOD,

COMITTA, SANTARSIERO, COLLETT, KEARNEY, STREET, FLYNN,

FONTANA AND CAPPELLETTI, FEBRUARY 14, 2022

REFERRED TO LABOR AND INDUSTRY, FEBRUARY 14, 2022

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 definitions, for improper

classification of employees and for criminal penalties;

providing for private right of action; and further providing

for administrative penalties, for retaliation for action

prohibited, for availability of information and for funding.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 2 of the act of October 13, 2010

(P.L.506, No.72), known as the Construction Workplace

Misclassification Act, is amended by adding a definition to

read:

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Debar." Action taken by the secretary to prohibit a

contractor, subcontractor or individual from contracting with or

participating in contracts for State-supervised or State-funded

construction and other State procurement contracts for a

specified period or permanently. The debarment will include all

divisions or other organizational elements of a contractor or

subcontractor unless limited by its terms to specific divisions

or organizational elements. The debarment may apply to

affiliates or other individuals or entities associated with the

contractor, subcontractor or individual if they are specifically

named and given written notice of the debarment and an

opportunity to appeal.

* * *

Section 2. Section 4(c)(2), (d) and (e) of the act are

amended to read:

Section 4. Improper classification of employees.

* * *

(2) A person served with an order to show cause shall

have a period of [20] 10 days from the date the order is

served to file an answer in writing.

* * *

(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,

the secretary shall refer the matter to the Office of Attorney

General for investigation or] that an employer has violated the

Workers' Compensation Act, the secretary shall impose

administrative penalties under section 6. In addition, the

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secretary may refer the matter to the Attorney General for

criminal investigation. The secretary shall make a referral if

the employer has previously been found in violation of this act

in another matter. The Attorney General has jurisdiction under

section 5 to initiate an investigation or prosecution of

criminal violations of this act regardless of whether a referral

has been made.

(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] to supply labor for construction knowing

the employer will misclassify the supplied 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.

* * *

Section 3. Section 5(a) of the act is amended and the

section is amended by adding a subsection to read:

Section 5. Criminal penalties.

(a) Grading.--[An employer, or officer or agent of an

employer, that intentionally violates section 4(a) commits:

(1) A misdemeanor of the third degree for a first

offense.

(2) A misdemeanor of the second degree for a second or

subsequent offense.] An employer, or officer or agent of an

employer who knowingly violates section 4(a) commits:

(1) A misdemeanor of the first degree if the employer

has no prior offense under section 4(a).

(2) A felony of the third degree if the employer has one

or more prior offenses under section 4(a).

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* * *

(d) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Prior offense." A conviction of a violation of section 4,

if the judgment of sentence was imposed before the defendant is

sentenced for a separate violation of section 4.

Section 4. The act is amended by adding a section to read:

Section 5.1. Private right of action.

(a) General rule.--An employee who has been misclassified in

violation of this act, or has been discharged, threatened or has

otherwise suffered retaliation, discrimination or any other

adverse action as a result of participating in an investigation

or reporting a violation of this act may bring a private right

of action in a court of common pleas in accordance with

established civil procedures of this Commonwealth.

(b) Time.--The action must be brought within three years

from the date the employee knew of the violation, retaliation or

discrimination.

under this section, the employee shall be entitled to the

following relief:

(1) Reinstatement of the employee without a loss in

seniority status, if applicable.

(2) Restitution equal to three times the amount of the

employee's wages and fringe benefits calculated from the date

of the violation, retaliation or discrimination.

(3) Reasonable attorney fees and costs of the action.

(4) Any other legal and equitable relief as the court

deems appropriate to make the employee whole.

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Section 5. Section 6(a) of the act is amended and the

section is amended by adding a subsection to read:

Section 6. Administrative penalties.

(a) General rule.--When the secretary finds that a person

has violated this act, the secretary may [assess]:

(1) Assess and collect civil penalties of not more than

$1,000 for the first violation, and not more than $2,500 for

each subsequent violation.

(2) Order a financial audit or tax audit of the person.

* * *

a violation of this act was intentional, the secretary shall

debar, for a set period or permanently, a contractor,

subcontractor or individual from bidding on or participating in

State-supervised construction and other State procurement

contracts.

Section 6. Sections 10, 11 and 17 of the act are amended to

read:

Section 10. Retaliation for action prohibited.

(a) General rule.--It shall be unlawful for an employer, or

officer or agent of an employer, to [discriminate in any manner

or take adverse action against any person in retaliation for

exercising rights protected under this act. Rights protected

under this act include, but are not limited to, the right to

file a complaint or inform any person about an employer's

noncompliance with this act.] discharge, threaten or otherwise

retaliate or discriminate in any manner against an employee

regarding compensation or other terms or conditions of

employment because the employee:

(1) participates in an investigation, hearing or inquiry

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by the secretary or any governmental authority; or

(2) reports or makes a complaint regarding the violation

of this act to a construction industry employer or any

governmental authority.

(a.1) Action.--An employee who suffers retaliation or

discrimination in violation of this section may bring a private

right of action under section 5.1.

(b) Good faith allegations of noncompliance.--Any person who

in good faith alleges noncompliance with this act shall be

afforded the rights provided by this act, notwithstanding the

person's failure to prevail on the merits.

a person within 90 days of the person's exercise of rights

protected under this act shall raise a rebuttable presumption of

having done so in retaliation for the exercise of those rights.

Section 11. Availability of information.

The department shall create a poster [for job sites] which

outlines the requirements and penalties under this act and shall

make the poster available on its Internet website. Every

employer subject to this act shall keep a summary of this act

and any regulations issued thereunder applicable to the

employer, posted in a conspicuous place where employees normally

pass and can read it, both on job sites and in any and all

places of business. At the discretion of the secretary, a toll-

free hotline telephone number may be established to receive

alleged violations.

Section 17. Funding.

(a) Enforcement.--The department shall not be required to

enforce this act until adequate funding is appropriated.

(b) Recovery of fees and costs.--The department, Office of

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Attorney General or a district attorney's office shall be

entitled to recover attorney fees and costs associated with the

investigation of construction worker misclassification from

employers who violate the provisions of this act.

Section 7. This act shall take effect in 60 days.

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