Trial Engrossment of Amendment A02909 to House Bill 1170 P.N. 2129, Regular Session 2019-2020

A02909

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1170

Session of

2019

INTRODUCED BY MACKENZIE, GALLOWAY, BARRAR, KEEFER, MILLARD,

NEILSON, READSHAW, MENTZER, EMRICK, KORTZ, BURNS, MALAGARI,

FARRY AND METCALFE, APRIL 9, 2019

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

JUNE 12, 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.

"CONSTRUCTION INDUSTRY EMPLOYER." AS FOLLOWS:

(1) AN INDIVIDUAL, ENTITY OR ORGANIZATION IN THE

CONSTRUCTION INDUSTRY, WHICH:

(I) TRANSACTS BUSINESS IN THIS COMMONWEALTH; AND

(II) EMPLOYS AT LEAST ONE EMPLOYEE IN THIS

COMMONWEALTH.

(2) 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 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

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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

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.

"LICENSE." AS FOLLOWS:

(1) 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:

(I) OPERATING A BUSINESS IN THIS COMMONWEALTH;

(II) CONDUCTING OPERATIONS IN THE CONSTRUCTION

INDUSTRY; OR

(III) COMPLETING A SPECIFIC CONSTRUCTION PROJECT.

(2) THE TERM INCLUDES ARTICLES OF INCORPORATION AND

DOMESTIC OR FOREIGN ENTITY REGISTRATIONS UNDER 15 PA.C.S.

(RELATING TO CORPORATIONS AND UNINCORPORATED ASSOCIATIONS).

(3) 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

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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. Individuals who are on the Deferred Action for

Childhood Arrivals recipient list as of the effective date of

this section are not considered to be an unauthorized employee

for the purpose of this law.

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. THE DEPARTMENT SHALL

HAVE THE AUTHORITY TO INVESTIGATE COMPLAINTS UNDER THIS ACT.

PURSUANT TO AN INVESTIGATION OF A COMPLAINT, THE DEPARTMENT MAY:

(1) ENTER AND INSPECT THE PLACE OF BUSINESS OR PLACE OF

EMPLOYMENT OF ANY EMPLOYER OF EMPLOYEES IN ANY OCCUPATION IN

THIS COMMONWEALTH AT ANY REASONABLE TIME, FOR THE PURPOSE OF

EXAMINING AND INSPECTING RECORDS OF THE EMPLOYER THAT IN ANY

WAY RELATE TO COMPLIANCE WITH THIS ACT.

(2) COPY ANY OR ALL RECORDS AS THE DEPARTMENT MAY DEEM

NECESSARY OR APPROPRIATE.

(3) REQUIRE FROM AN EMPLOYER FULL AND ACCURATE

STATEMENTS IN WRITING, AT SUCH TIMES AS THE DEPARTMENT MAY

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DEEM NECESSARY, OF THE WORK AUTHORIZATION VERIFICATION

PROCESS FOR ALL EMPLOYEES IN THE EMPLOYER'S EMPLOYMENT.

(4) Interrogate persons for the purpose of ascertaining

whether an employer has complied with this act.

(b) Form.--The 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).

prescribed complaint form alleging that an employer knowingly

employs an unauthorized employee, the department shall

investigate whether the employer has violated section 3(a). IF

ALL THE INFORMATION REQUIRED TO COMPLETE THE FORM HAS BEEN

PROVIDED, INCLUDING THE NAME OF THE PERSON FILING THE COMPLAINT.

(d) Authority to investigate.--The department may

investigate a complaint that is not submitted on a prescribed

complaint form, including an anonymous complaint.

(e) Prohibition.--The department may not investigate a

complaint that is based solely on race, color or national

origin.

(f) Verification.--If investigating a complaint, the

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

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States.

(g) Notification and action.--If, after an investigation,

the department determines that the alleged employee is an

unauthorized employee, the department shall do all of the

following:

(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

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.

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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.

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

expedite the action, including assigning the hearing at the

earliest practicable date.

(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.

(j) 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

employer did not knowingly employ an unauthorized employee.

(k) 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

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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 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 five business days, to verify

in writing to the department that the employer has terminated

the employment of each unauthorized employee in this

Commonwealth.

(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

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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 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 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 shall order suspension for

a term not 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.

(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

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shall prohibit an agency from charging any applicable fee for

the suspension or reinstatement of a license.

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

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

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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

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 COURT-ORDERED SANCTIONS FOR

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 8. Effective date.

This act shall take effect July 1, 2020 IN ONE YEAR.

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