Trial Engrossment of Amendment A01894 to House Bill 1170 P.N. 2009, Regular Session 2019-2020

A01894

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1170

Session of

2019

INTRODUCED BY MACKENZIE, GALLOWAY, BARRAR, T. DAVIS, KEEFER,

MILLARD, NEILSON, READSHAW, MENTZER, EMRICK AND KORTZ,

APRIL 9, 2019

AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF

REPRESENTATIVES, AS AMENDED, JUNE 4, 2019

AN ACT

Prohibiting the employment of unauthorized employees; requiring

construction industry employers to verify the Social Security

numbers of employees; and imposing penalties.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Construction

Industry Employee Verification Act.

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:

"Agency." An agency, department, board or commission of the

Commonwealth or of a municipality that issues a license for

purposes of operating a business in this Commonwealth.

"Construction industry." The industry which engages in the

erection, reconstruction, demolition, alteration, modification,

custom fabrication, building, assembling, site preparation and

repair work or maintenance work done on real property or

premises under a contract, including work for a public body or

work paid for from public funds.

"Construction industry employer." An individual, entity or

organization that transacts business in this Commonwealth in the

construction industry, has a license issued by an agency and

employs at least one employee in this Commonwealth. THE TERM

INCLUDES A STAFFING AGENCY THAT SUPPLIES WORKERS TO A

CONSTRUCTION INDUSTRY EMPLOYER.

"DEPARTMENT." THE DEPARTMENT OF LABOR AND INDUSTRY OF THE

COMMONWEALTH.

"EMPLOY." TO ENTER INTO AN EMPLOYER-EMPLOYEE RELATIONSHIP

WITH AN INDIVIDUAL OR TO USE A CONTRACT, SUBCONTRACT OR EXCHANGE

WITH AN INDIVIDUAL TO OBTAIN LABOR.

"Employee." An individual for whom a construction industry

employer is required by law to file a Form W-2 with the Internal

Revenue Service. AN INDIVIDUAL WHO HAS ENTERED INTO AN EMPLOYER-

EMPLOYEE RELATIONSHIP WITH A CONSTRUCTION INDUSTRY EMPLOYER OR

ENTERS INTO A CONTRACT, SUBCONTRACT OR EXCHANGE WITH A

CONSTRUCTION INDUSTRY EMPLOYER TO PROVIDE LABOR.

"Employer." A construction industry employer.

"E-Verify program." The Internet-based program administered

by the United States Department of Homeland Security and the

United States Social Security Administration which allows

employers to verify an employee's work-authorization status. The

term includes any successor program.

"License." A permit, certificate, approval, registration,

charter or similar form of authorization that is required by law

and issued by an agency for the purposes of operating a business

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in this Commonwealth. The term includes articles of

incorporation and partnership registrations. The term does not

include a professional or occupational license or certificate

granted to an individual to engage in a profession or trade.

"SUBCONTRACTOR." A PERSON REGARDLESS OF TIER, INCLUDING, BUT

NOT LIMITED TO, A STAFFING AGENCY THAT SUPPLIES WORKERS TO A

CONSTRUCTION INDUSTRY EMPLOYER UNDER A CONTRACT. THE TERM SHALL

NOT INCLUDE PERSONS THAT ARE MATERIAL SUPPLIERS FOR A PROJECT.

"Unauthorized employee." An individual who does not have the

legal right or authorization under Federal law to work in the

United States.

Section 3. Prohibited employment.

(a) Prohibition.--An employer may not knowingly employ an

unauthorized employee.

(b) Verification.--On and after the effective date of this

section, each employer who hires an employee shall verify the

employment eligibility of the employee through the E-Verify

program and shall keep a record of the verification for the

duration of the employee's employment or three years, whichever

is longer. Within 30 days of the end of the calendar quarter, an

employer shall certify to the department that the employer has

utilized the E-Verify program as required by this act for all

employees hired during the last completed calendar quarter.

shall be on a form prescribed by the department and shall comply

with the following additional requirements:

(1) The statement shall include a certification that the

information in the statement is true and correct and that the

willful submission of false or misleading information in

connection with the verification shall be subject to

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punishment under 18 Pa.C.S. § 4904 (relating to unsworn

falsifications to authorities).

(2) The statement shall be signed by a representative of

the employer who has sufficient knowledge and authority to

make the representations and certifications contained in the

statement.

WORKERS TO MULTIPLE INDUSTRIES, SUBSECTIONS (A) AND (B) SHALL

ONLY APPLY TO WORKERS SUPPLIED FOR THE CONSTRUCTION INDUSTRY.

Section 4. Procedures, presumptions and defenses.

(A) COMPLAINTS.--A COMPLAINT ABOUT A VIOLATION OF SECTION

3(A) MAY BE SUBMITTED TO THE DEPARTMENT.

(a) (B) Form.--The Attorney General DEPARTMENT shall

prescribe a complaint form for an individual to allege a

violation of section 3(a). An individual who knowingly provides

materially false information in a complaint form under this

subsection shall be subject to punishment under 18 Pa.C.S. §

4904 (relating to unsworn falsification to authorities).

(b) (C) Duty to investigate.--Upon receipt of a complaint on

a prescribed complaint form alleging that an employer knowingly

employs an unauthorized employee, the Attorney General

DEPARTMENT shall investigate whether the employer has violated

section 3(a).

DEPARTMENT may investigate a complaint that is not submitted on

a prescribed complaint form, including an anonymous complaint.

(d) (E) Prohibition.--The Attorney General DEPARTMENT may

not investigate a complaint that is based solely on race, color

or national origin.

(e) (F) Verification.--If investigating a complaint, the

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Attorney General DEPARTMENT shall verify the work authorization

of the alleged unauthorized employee with the Federal Government

under section 642(c) of the Illegal Immigration Reform and

Immigrant Responsibility Act of 1996 (Public Law 104-208, 8

U.S.C. § 1373(c)). A Commonwealth or local official may not

attempt to independently make a final determination on whether

an unauthorized employee is authorized to work in the United

States.

(f) (G) Notification and action.--If, after an

investigation, the Attorney General DEPARTMENT determines that

the alleged employee is an unauthorized employee, the Attorney

General DEPARTMENT shall do all of the following:

(1) Notify United States Immigration and Customs

Enforcement of the unauthorized employee.

(2) Bring (1) FOR A FIRST VIOLATION, THE DEPARTMENT

SHALL ISSUE A WARNING LETTER DETAILING THE VIOLATION AND

INFORMING THE CONSTRUCTION INDUSTRY EMPLOYER OF THE

PROVISIONS OF THIS ACT. NOTWITHSTANDING PARAGRAPH (2), A

VIOLATION BY A CONSTRUCTION INDUSTRY EMPLOYER THAT OCCURS 10

YEARS OR MORE AFTER A PRIOR VIOLATION SHALL BE DEEMED A FIRST

VIOLATION. THE FOLLOWING SHALL APPLY:

(I) THE DEPARTMENT MAY NOT ISSUE A WARNING LETTER IF

THE EMPLOYER DEMONSTRATES THAT THE EMPLOYMENT ELIGIBILITY

OF THE UNAUTHORIZED EMPLOYEE WAS VERIFIED IN GOOD FAITH

THROUGH THE E-VERIFY PROGRAM IN ACCORDANCE WITH SECTION

3(B).

(II) AFTER THE ISSUANCE OF A WARNING LETTER, THE

EMPLOYER SHALL VERIFY IN WRITING TO THE DEPARTMENT WITHIN

10 BUSINESS DAYS THAT THE EMPLOYER HAS TERMINATED THE

EMPLOYMENT OF EACH UNAUTHORIZED EMPLOYEE IN THIS

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COMMONWEALTH. IF THE EMPLOYER FAILS TO PROVIDE SUCH

VERIFICATION, THE VIOLATION SHALL CONSTITUTE A SECOND

VIOLATION, AND THE DEPARTMENT SHALL MAKE A REFERRAL TO

THE ATTORNEY GENERAL UNDER PARAGRAPH (2).

(III) THE EMPLOYER MAY APPEAL THE ISSUANCE OF THE

WARNING LETTER UNDER THE PROVISIONS OF 2 PA.C.S.

(RELATING TO ADMINISTRATIVE LAW AND PROCEDURE).

(2) FOR A SECOND OR SUBSEQUENT VIOLATION, THE DEPARTMENT

SHALL REFER THE CASE TO THE ATTORNEY GENERAL FOR ENFORCEMENT.

THE ATTORNEY GENERAL SHALL BRING an action against the

employer in the county where the unauthorized employee is or

was employed by the employer. The Attorney General shall not

bring an action against an employer for a violation that

occurred before the effective date of this section.

(g) (H) Expedited action.--Upon docketing, the court shall

expedite the action, including assigning the hearing at the

earliest practicable date.

(h) (I) Determination.--In determining whether an employee

is an unauthorized employee, the court shall consider only the

Federal Government's determination under section 642(c) of the

Illegal Immigration Reform and Immigrant Responsibility Act of

1996. The Federal Government's determination shall create a

rebuttable presumption of the employee's status. The court may

take judicial notice of the Federal Government's determination

and may request the Federal Government to provide automated or

testimonial verification under section 642(c) of the Illegal

Immigration Reform and Immigrant Responsibility Act of 1996.

(i) (J) (g) Rebuttable presumption.--Proof that the employer

verified the employment authorization of an employee through the

E-Verify program shall create a rebuttable presumption that an

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employer did not knowingly employ an unauthorized employee.

(j) (K) (h) Affirmative defense.--For the purposes of this

section, it shall be an affirmative defense if the employer

demonstrates that it has complied in good faith with section

274A(b) of the Immigration and Nationality Act (66 Stat. 163, 8

U.S.C. § 1324a(b)). An employer shall be considered to have

complied with section 274A(b) of the Immigration and Nationality

Act, notwithstanding an isolated, sporadic or accidental

technical or procedural failure to meet the requirements, if the

employer establishes a good faith attempt to comply with section

274A(b) of the Immigration and Nationality Act.

SECTION 5. PENALTIES AND REMEDIAL ORDERS.

(a) Order.--Upon a finding of a violation under section 3(a)

PURSUANT TO AN ACTION BROUGHT BY THE ATTORNEY GENERAL UNDER THIS

ACT, the court shall order all of the following:

(1) The employer to terminate the employment of each

unauthorized employee.

(2) The employer to a three-year probationary period for

each business location where the unauthorized employee

performed work. During the probationary period the employer:

(i) shall file quarterly reports with the Attorney

General DEPARTMENT of each new employee who is hired by

the employer at the business location where the

unauthorized employee performed work; and

(ii) may not knowingly employ an unauthorized

employee.

(3) The employer, within three FIVE business days, to

verify in writing to the Attorney General DEPARTMENT that the

employer has terminated the employment of each unauthorized

employee in this Commonwealth.

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(4) Agencies to suspend each license that is held by the

employer if the employer fails to timely submit the

verification. Each license that is suspended under this

paragraph shall remain suspended until the employer complies.

Notwithstanding any other law, on filing of the verification,

each license shall be reinstated immediately by the

appropriate agency. For the purposes of this paragraph, a

license that is subject to suspension under this paragraph

shall include each license that is held by the employer

specific to the business location where the unauthorized

employee performed work. If the employer does not hold a

license specific to the business location where the

unauthorized employee performed work, the court shall order

suspension of each license that is held by the employer

pertaining to operations anywhere within this Commonwealth.

(b) Duration.--The following shall apply:

(1) For a first SECOND violation of section 3(a), the

court may order the agency to suspend each license described

under subsection (a)(4) that is held by the employer for a

period not to exceed 10 30 business days.

(2) For a SUBSEQUENT VIOLATION OF SECTION 3(A) OR A

violation occurring during a three-year probationary period

under subsection (a)(2), the court may SHALL order suspension

for a term not to exceed LESS THAN one year UP TO THE

PERMANENT REVOCATION OF EACH LICENSE.

the duration of a suspension, the court shall consider the

following factors:

(1) The number of unauthorized employees employed by the

employer.

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(2) Any prior misconduct by the employer.

(3) The degree of harm resulting from the violation.

(4) Whether the employer made good faith efforts to

comply with any applicable requirements.

(5) The duration of the violation.

(6) The role of the directors, officers or principals of

the employer in the violation.

(7) Any other factors the court deems appropriate.

(D) SUSPENSION AND REINSTATEMENT FEES.--NOTHING IN THIS ACT

SHALL PROHIBIT AN AGENCY FROM CHARGING ANY APPLICABLE FEE FOR

THE SUSPENSION OR REINSTATEMENT OF A LICENSE.

Section 5. Penalties.

(a) Violations.--The following shall apply to a violation

under section 3(a):

(1) For a first violation, the department shall issue a

warning letter detailing the violation and informing the

construction industry employer of the provisions of this act.

The following shall apply:

(i) The department may not issue or post a warning

letter if the employer demonstrates that the employment

eligibility of the unauthorized employee was verified in

good faith through the E-Verify program in accordance

with section 3(b).

(ii) After the issuance of a warning letter, the

employer shall verify in writing to the department within

10 business days that the employer has terminated the

employment of each unauthorized employee in this

Commonwealth. If the employer fails to provide such

verification, the violation shall constitute a second

violation.

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(2) For a second or subsequent violation, the following

shall apply:

(i) The department shall post the letter detailing

the violation on the department's publicly accessible

Internet website.

(ii) The department may issue an order to stop work

on a worksite related to the investigation, which may

remain in place until the violation is corrected. Stop-

work orders may be enforced by the Attorney General upon

referral by the department. The following shall apply to

a stop-work order issued by the department under this

section:

(A) The order may require compliance with

conditions necessary to ensure that the employer

complies with this act.

(B) The order shall take effect when served upon

the employer by first class mail or posting at the

employer's worksite.

released by the department or a court of competent

jurisdiction.

(D) 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.

(E) An order releasing a stop-work order may

include a requirement that the employer file with the

department periodic reports for a probationary period

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that shall not exceed two years demonstrating the

employer's continued compliance with this act.

(3) Upon receiving a referral from the department, the

Attorney General shall bring an action against the employer

in Commonwealth Court. If the court finds that the employer

engaged in a willful violation, the court may order the

suspension or revocation of licenses granted to the employer

for a period of up to three years.

(4) Notwithstanding the provisions of paragraph (1), (2)

or (3), a violation by an employer that occurs 10 years or

more after a prior violation shall be deemed to be a first

violation.

(b) Civil penalty.--An employer that violates section 3(b)

shall be subject to a civil penalty of not less than $250 and

not more than $1,000 for each violation, to be imposed by the

department. Civil penalties may be enforced by the Attorney

General upon referral by the department.

shall be subject to the notice, appeal and other provisions of 2

Pa.C.S. (relating to administrative law and procedure).

SECTION 6. PROTECTION FROM RETALIATION.

(A) GENERAL RULE.--IT SHALL BE UNLAWFUL FOR A CONSTRUCTION

INDUSTRY EMPLOYER TO DISCHARGE, THREATEN OR OTHERWISE RETALIATE

OR DISCRIMINATE AGAINST AN EMPLOYEE REGARDING COMPENSATION OR

OTHER TERMS OR CONDITIONS OF EMPLOYMENT BECAUSE THE EMPLOYEE:

(1) PARTICIPATES IN AN INVESTIGATION, HEARING OR INQUIRY

HELD BY THE SECRETARY OF LABOR AND INDUSTRY OR ANY OTHER

GOVERNMENTAL AUTHORITY UNDER THIS ACT; OR

(2) REPORTS OR MAKES A COMPLAINT REGARDING THE VIOLATION

OF THIS ACT TO A CONSTRUCTION INDUSTRY EMPLOYER OR

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GOVERNMENTAL AUTHORITY.

(B) ACTIONS.--

(1) AN EMPLOYEE WHO SUFFERS RETALIATION OR

DISCRIMINATION IN VIOLATION OF THIS SECTION MAY BRING AN

ACTION IN A COURT OF COMMON PLEAS IN ACCORDANCE WITH

ESTABLISHED CIVIL PROCEDURES OF THIS COMMONWEALTH.

(2) THE ACTION MUST BE BROUGHT WITHIN THREE YEARS FROM

THE DATE THE EMPLOYEE KNEW OF THE RETALIATION OR

DISCRIMINATION.

UNDER THIS SECTION, THE EMPLOYEE SHALL BE ENTITLED TO THE

FOLLOWING RELIEF:

(1) REINSTATEMENT OF THE EMPLOYEE, IF APPLICABLE.

(2) RESTITUTION EQUAL TO THREE TIMES THE AMOUNT OF THE

EMPLOYEE'S WAGES AND FRINGE BENEFITS CALCULATED FROM THE DATE

OF THE RETALIATION OR DISCRIMINATION.

(3) REASONABLE ATTORNEY FEES AND COSTS OF THE ACTION.

(4) ANY OTHER LEGAL AND EQUITABLE RELIEF AS THE COURT

DEEMS APPROPRIATE.

SECTION 7. IMMUNITY AND COMPLIANCE.

(A) IMMUNITY.--A CONSTRUCTION INDUSTRY EMPLOYER THAT RELIES

IN GOOD FAITH ON THE E-VERIFY PROGRAM TO VERIFY EMPLOYMENT

ELIGIBILITY OF NEW EMPLOYEES UNDER THIS ACT SHALL HAVE NO

LIABILITY TO AN INDIVIDUAL WHO IS NOT HIRED OR WHO IS DISCHARGED

FROM EMPLOYMENT IF INCORRECT INFORMATION HAS BEEN PROVIDED TO

THE CONSTRUCTION INDUSTRY EMPLOYER.

(B) CONTRACTOR AND SUBCONTRACTOR COMPLIANCE.--EXCEPT AS

PROVIDED IN SUBSECTION (C), NOTHING IN THIS ACT MAY BE CONSTRUED

TO RENDER A CONTRACTOR RESPONSIBLE FOR A VIOLATION OF SECTION

3(A) BY A SUBCONTRACTOR OR A SUBCONTRACTOR RESPONSIBLE FOR A

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VIOLATION BY ANOTHER SUBCONTRACTOR.

NOT BE CONSIDERED IN VIOLATION OF SECTION 3(A) WHEN A

SUBCONTRACTOR HAS KNOWINGLY EMPLOYED AN UNAUTHORIZED EMPLOYEE,

IF THE CONTRACTOR HAS DONE THE FOLLOWING:

(1) REQUIRED COMPLIANCE WITH THIS ACT IN THE CONTRACT

WITH THE SUBCONTRACTOR, INCLUDING PROVIDING FOR THE

TERMINATION OF THE CONTRACT UPON A VIOLATION OF THIS ACT BY

THE SUBCONTRACTOR.

(2) OBTAINED WRITTEN VERIFICATION FROM THE SUBCONTRACTOR

THAT THE SUBCONTRACTOR IS AWARE OF THE PROVISIONS OF THIS ACT

AND IS RESPONSIBLE FOR COMPLIANCE.

Section 6 8. Effective date.

This act shall take effect in 60 days JULY 1, 2020.

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