PRINTER'S NO. 616
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
577
Session of
2023
INTRODUCED BY KANE, TARTAGLIONE, L. WILLIAMS, FONTANA, KEARNEY,
HUGHES, COLLETT, HAYWOOD, COSTA, DILLON, CAPPELLETTI,
SANTARSIERO AND STREET, APRIL 19, 2023
REFERRED TO LABOR AND INDUSTRY, APRIL 19, 2023
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:
* * *
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"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.
* * *
(c) Order to show cause.--
* * *
(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.--
(1) 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
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impose administrative penalties under section 6.
(2) In addition to imposing penalties under paragraph
(1), the 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).
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(2) A felony of the third degree if the employer has one
or more prior offenses under section 4(a).
* * *
(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 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 that the employee knew of the violation,
retaliation or discrimination.
(c) Relief.--If an employee prevails in an action commenced
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.
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(4) Other legal and equitable relief the court deems
appropriate to make the employee whole.
Section 5. Sections 6(a) and 10(a) of the act are amended
and the sections are amended by adding subsections 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.
* * *
(c) Intentional violation.--If the secretary determines that
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 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.
* * *
Section 6. Sections 11 and 17 of the act are amended to
read:
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 under this act applicable to the
employer, posted in a conspicuous place where employees normally
pass and can read it, both on job sites and in 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
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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