Pennsylvania HB 721: 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; further providing for administrative penalties, for retaliation for action prohibited, for availability of information, for use of penalty funds and for funding; and imposing penalties.

Bill Text

PRIOR PRINTER'S NO. 742 PRINTER'S NO. 1330
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 721
Session of
2025
INTRODUCED BY DONAHUE, PROKOPIAK, SANCHEZ, FREEMAN, PROBST,
PIELLI, RABB, BRENNAN, GIRAL, SCHLOSSBERG, HADDOCK, NEILSON,
WARREN, GALLAGHER, CERRATO, MALAGARI, BOYD AND CIRESI,
FEBRUARY 25, 2025
AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF
REPRESENTATIVES, AS AMENDED, APRIL 9, 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; further providing for
administrative penalties, for retaliation for action
prohibited, for availability of information, for use of
penalty funds and for funding; and imposing penalties.
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:
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"Debar." Action taken by the secretary to prohibit a
contractor, subcontractor or person from contracting with or
participating in contracts for public work for a period of at
least three years.
* * *
"Public work." As defined in section 2(5) of the act of
August 15, 1961 (P.L.987, No.442), known as the Pennsylvania
Prevailing Wage Act.
* * *
"SUCCESSOR ENTITY." AN ENTITY THAT MEETS ANY OF THE
FOLLOWING CRITERIA:
(1) H AS ONE OR MORE OF THE SAME PRINCIPALS OR OFFICERS
AS THE EMPLOYER AGAINST WHOM THE ORDER WAS ISSUED.
(2) PERFORMS SIMILAR WORK WITHIN THE SAME GEOGRAPHICAL
AREA.
(3) OCCUPIES THE SAME PREMISES.
(4) SHARES THE SAME TELEPHONE NUMBER OR FACSIMILE
NUMBER.
(5) HAS THE SAME EMAIL ADDRESS OR INTERNET WEBSITE.
(6) EMPLOYS SUBSTANTIALLY THE SAME WORKFORCE OR
ADMINISTRATIVE EMPLOYEES, OR BOTH.
(7) UTILIZES THE SAME TOOLS, EQUIPMENT OR FACILITIES.
(8) EMPLOYS OR ENGAGES THE SERVICES OF ANY PERSON OR
PERSONS INVOLVED IN THE DIRECTION OR CONTROL OF THE OTHER.
(9) LISTS SUBSTANTIALLY THE SAME WORK EXPERIENCE.
* * *
Section 2. Section 4(d) and (e) of the act are amended to
read:
Section 4. Improper classification of employees.
* * *
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(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
failed to properly classify an individual as an employee for
the purposes of 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 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 or renews a contract with an employer
[knowing the employer intends to misclassify] to supply labor
for construction knowing the employer will IS LIKELY TO
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
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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).
(2) A felony of the third degree if the employer has one
or more prior offenses under section 4(a).
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(d) D