Pennsylvania Construction Workplace Misclassification Act

Employers frequently misclassify construction workers as independent contractors, rather than employees. The Pennsylvania Construction Workplace Misclassification Act, 43 P.S. §933.1, has strict requirements that must be met for an individual to be considered an independent contractor. This law prohibits misclassification of employees as independent contractors in all commercial and residential construction in the Commonwealth of Pennsylvania.

For purposes of workers’ compensation, unemployment compensation and improper classification of employees, an individual who performs services in the construction industry is an independent contractor only if the individual has a written contract to perform services, is free from control or direction over performance of services under the contract and the individual is customarily engaged in an independently established trade, occupation, profession or business.

To meet the customarily engaged in an independently established trade, occupation, profession or business standard, the individual must possess the essential tools, equipment and other assets necessary to perform the services independent of the person for whom the services are performed; the individual’s arrangement with the person for whom the services are performed must be such that the individual realizes a profit or suffers a loss as a result of performing the services through a business in which the individual has a proprietary interest; and the individual must maintain a business location that is separate from the location of the person for whom the services are being performed.

To be deemed a contractor, rather than an employee, the individual must have previously performed the same or similar work free from direction or control, or hold himself out to other persons as available and able to perform the same or similar services free from direction or control and maintain liability insurance of at least $50,000. Failure to withhold Federal or State income taxes or pay unemployment compensation contributions or workers’ compensation premiums is not considered in determining whether the individual is an independent contractor.

The Pennsylvania Construction Workplace Misclassification Act prohibits any form of retaliation. It is a violation of the law for an employer, officer or agent to discriminate in any manner or take any adverse action against any person in retaliation for exercising rights protected under the law. The rights that are protected include filing a complaint or advising any person about an employer’s failure to comply with the law. In addition, any person who in good faith alleges that there has been a violation of the law is protected from retaliation, whether or not the person is correct about the violation. The law also assumes that if an adverse action is taken against a person within 90 days of a complaint under the law there is a rebuttable presumption of retaliation. If you work in construction and believe that you have been improperly classified as an independent contractor, rather than an employee, or if you have been retaliated against for claiming that you should be treated as an employee, call Abramson Employment Law at 267-470-4742, or contact us online to discuss your legal options for a claim under the Pennsylvania Construction Workplace Misclassification Act.