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DA to crack down on 'independent' contracting in construction - (2/16/2011)
mcall.com
DA to crack down on 'independent' contracting in construction
By Riley Yates, OF THE MORNING CALL
4:29 PM EST, February 15, 2011
Construction firms that label their employees "independent contractors" in order to skirt taxes and labor laws could be targeted in Northampton County under a new state law, District Attorney John Morganelli said Tuesday.
The Pennsylvania Construction Workplace Misclassification Act, which took effect last week, establishes civil and criminal penalties for companies that improperly claim their workers aren't in fact employees, to avoid paying unemployment, workers' compensation and local wage taxes.
"Today, I want to notify Northampton County construction firms that the Misclassification Act will be enforced," said Morganelli said at a news conference.
The law, which covers only the construction industry, was passed last year and signed by now former Gov. Ed Rendell. It came amid pressure from union laborers who said some companies were gaining an unfair advantage by misclassifying their workers.
The law establishes limits on who can be considered an independent contractor. Among the requirements: Independent contractors must have a written contract, supervise and control their own work, own or be a partner in their business, and have liability insurance of at least $50,000, Morganelli said.
Morganelli said he has received "two or three" complaints under the new law and has begun looking into two of them. Violators could be charged locally, referred to the Department of Labor, or notified and encouraged to change their practices, he said.
Under the law, anyone misclassifying an employee can face criminal prosecution, fines of up to $2,500 per violation and a court issued stop-work order, Morganelli said.
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