An Act amending the act of October 13, 2010 (P.L.506, No.72), known as the Construction Workplace Misclassification Act, 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, for use of penalty funds and for funding.

PRINTER'S NO. 818
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 72
Session of
2025
INTRODUCED BY KANE, TARTAGLIONE, L. WILLIAMS, ROBINSON, COLLETT,
KEARNEY, HUGHES, STREET, COSTA, SAVAL, FARRY, SANTARSIERO,
PISCIOTTANO AND FLYNN, MAY 22, 2025
REFERRED TO LABOR AND INDUSTRY, MAY 22, 2025
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, for use of
penalty funds 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 definitions 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
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contractor, subcontractor or person from contracting for or
participating in contracts for public work projects and other
State procurement contracts for a specified period not to exceed
three years for the first offense and five years for a second or
subsequent offense. The debarment:
(1) Shall cover future projects and contracts and
current projects and contracts entered into but on which the
debarred contractor, subcontractor or person's work has not
begun as of the effective date of the debarment.
(2) Shall include all divisions or other organizational
elements of a contractor or subcontractor unless limited by
the terms of the debarment to specific divisions or
organizational elements and shall apply to any other entity
or organization in which the debarred contractor,
subcontractor or person has an ownership interest.
(3) May apply to an affiliate or other person associated
with the debarred contractor, subcontractor or person if the
information received by the secretary under section 4(c)(1)
or the investigation under section 4(c)(1) demonstrates that
the affiliate or other person supplied labor for the
construction project knowing the workers were being
misclassified. The affiliate or other person must be
specifically named as a party in an order to show cause under
section 4 with the same procedural rights and obligations as
other parties subject to an order to show cause under this
act. An affiliate or other person under this paragraph shall
include any owner, principal, partner or officer of the
contractor, subcontractor or person, and any business entity
in which the contractor, subcontractor or person has an
interest as owner, principal, parent or subsidiary of the
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entity.
* * *
"Public work." The term shall have the meaning given to it
in section 2(5) of the act of August 15, 1961 (P.L.987, No.442),
known as the Pennsylvania Prevailing Wage Act.
* * *
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] violated this act , the
secretary shall 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 adjudicated to
be in violation of this act. The Attorney General has
jurisdiction under section 5 to initiate an investigation or
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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 second degree if the employer
has no prior offense under section 4(a).
(2) A misdemeanor of the first degree if the employer
has one prior offense under section 4(a).
(3) A felony of the third degree if the employer has two
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
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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) Commencement.--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.
(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.
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(a) General rule.--When the secretary finds that a person
has violated this act, the secretary [may assess]:
(1) Shall assess and collect [civil] administrative
penalties of not more than $1,000 for the first violation,
and not more than $2,500 for each subsequent violation.
(2) May 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 the employer.
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
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.
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* * *
Section 6. Sections 11, 12 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 12. Use of penalty funds.
[Any sum collected as a penalty under:
(1) Sections 6, 7 and 9 for a violation of section 4(a)
(1) shall be paid into the Workers' Compensation
Administration Fund.
(2) Sections 6, 7 and 9 for a violation of section 4(a)
(2) shall be paid into the Special Administration Fund
created under section 601.1 of the Unemployment Compensation
Law.
(3) Section 9 for a violation of any other provision of
this act shall be divided equally between the Workers'
Compensation Administration Fund and the Special
Administration Fund.] Notwithstanding any other provision of
law to the contrary, any sum collected as a penalty,
recovered attorney fees or costs associated with
investigation and enforcement actions shall be deposited into
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a restricted revenue account in the General Fund to be used
for future enforcement of this act.
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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