Bureau of Labor Law Compliance Enforcement of the Construction Workplace Misclassification Act (Act 72) 1
S COPE OF B UREAU OF L ABOR L AW C OMPLIANCE ’ S E NFORCEMENT Minimum Wage Apprenticeship Prevailing Wage Child Labor Wage Payment and Overtime and Training Underground Construction Utility Line Workplace Equal Pay Protection Misclassification (PA One Call) (Act 72) Prohibition of Excessive Overtime Industrial Seasonal Farm Personnel File Medical Pay in Health Care (Act Homework 102) 2
T HE B UREAU ’ S C OMPLAINT P ROCESS 3
W AYS TO F ILE C OMPLAINTS • The Bureau can accept both paper and online submissions • These forms are in both English and Spanish • The Bureau’s website includes links to the forms and web applications, in which complaints can be inputted directly by employees • PA was one of the first states to allow online complaints to be filed in the early 2000’s 4
C ONSTRUCTION W ORKPLACE M ISCLASSIFICATION (A CT 72) C OMPLAINT F ORM 5
W HO CAN F ILE C OMPLAINTS • Complaints are filed directly to the Bureau and must be in writing • Complaints under Act 72 spawn audits and can be kept anonymous • Anyone can file a complaint. Anyone. • Affected workers, other employers, local/state/federal agencies • Complaints can be generated from findings made during a construction jobsite visit or from referrals; investigator performing visit/audit can be “complainant” 6
S UBMITTING A C ASE • After a case is submitted, manual complaints are logged into the computer system by clerical staff, and online submissions are automatically placed into a queue • Case is assigned to one of five district offices determined by geographic location of company or work headquarters 7
B UREAU I NVESTIGATIONS • Bureau HQ assigns cases to field offices after complaints are filed, or information is supplied of potential violation • Investigations commence upon assignment • Bureau investigators go to job sites to inspect for Act 72 compliance, as well as potential child labor violations, PA One Call matters, prevailing wage, overtime or minimum wage, and Apprenticeship and Training issues 8
BLLC I NVESTIGATIONS ( CONTINUED ) • Bureau investigators identify themselves • Make known that they are doing a “site visit” to ensure compliance with Act 72, the Prevailing Wage Act, wage laws, and appropriate labor standards • Who, what, where, when, why, how… • Ask the name of employee • Ask the employer’s name • Classification of employee • What is the rate of pay? 9
The Construction Workplace Misclassification Act (Act 72) • ACT 72 (43 P.S. §§ 933.1 ‐‐ 933.17) • House Bill 400 • Enacted on October 13, 2010 • Effective on February 10, 2011 • Establishes a definition of “independent contractor” in construction for purposes of workers’ compensation, unemployment compensation, and worker classification 10
A PPLICATION OF A CT 72 • Violation for employer, or officer or agent of employer, who fails to properly classify an individual as an employee and provide the coverage required under the Workers’ Compensation Act or Unemployment Compensation Act (43 P.S. § 933.4) • Act 72 applies to any construction (43 P.S. § 933.2) • Includes private construction and public work construction; law applies whether or not work is for a public body or paid for from public funds • Enforcement (43 P.S. §§ 933.5 ‐ 933.6) • Attorney General (criminal penalties) • District Attorneys (criminal penalties) • Secretary of Labor & Industry (administrative penalties and/or stop work orders) 11
W HISTLEBLOWER D ISCRIMINATION P ROTECTION • Section 10(a) explicitly prohibits an employer from discriminating in any manner or taking adverse action against any person for exercising any right protected by the Act, including the filing of a complaint with the Department or informing any person about an employer’s noncompliance • Section 10(b) makes clear that a complainant’s failure to prevail on the merits on allegations of employer noncompliance does not remove the retaliation prohibition set forth in subsection (a), so long as the complainant’s allegations were made in good faith • Section 10(c) creates a rebuttable presumption that the taking by an employer of adverse action against a person within 90 days of that person’s exercise of rights protected by the Act constitutes prohibited retaliation 12
A CT 72 C RITERIA • Bureau interviews workers, employers, and any other interested parties • The Bureau compares complaints with the criteria established by the Act • The Act states that to be a valid contractor, a person must have a written contract with the business/person with whom he/she is working, be free from control of control in performance of services, and be an individual customarily and independently engaged in that business (43 P.S. § 933.3(a)) 13
You may be properly classified contractor if… (…and only if…) • You have a written contract with the business or person with whom you work (43 P.S. § 933.3(a)(1)) • You control and direct your own work (43 P.S. § 933.3(a)(2)) • 43 P.S. § 933.3(b) breaks 43 P.S. § 933.3(a)(3) into 6 parts: • You possess the tools that are needed to perform your work • Your arrangement with the business you work for allows you to earn a profit or suffer a loss from your work • You are an owner or partner in your own business • Your business location is separate from the location of the business or person which hired you to perform the construction • You previously worked as an independent contractor, or you hold yourself out to the public as available and able to work as an independent contractor • You have liability insurance of at least $50,000 14
F ACTORS N OT C ONSIDERED U NDER A CT 72 • Failure to withhold Federal or State income taxes or pay unemployment compensation contributions or workers' compensation premiums with respect to an individual's remuneration shall not be considered in determining whether the individual is an independent contractor for purposes of the Workers' Compensation Act or the Unemployment Compensation Law (43 P.S. § 933.3(c)) • Individual who is an independent contractor as determined under this section is not an employee for purposes of the Workers' Compensation Act…Nothing in this act shall be construed to affect section 321(2) of the Workers' Compensation Act (43 P.S. § 933.3(d)) • For purposes of section 4(l)(2)(B) of the Unemployment Compensation Law, an individual is customarily engaged in an independently established trade, occupation, profession or business with respect to services the individual performs in the construction industry only if the criteria in subsection (b) are satisfied…Except as provided, nothing in this act shall be construed to affect any exclusion from “employment” as defined in the Unemployment Compensation Law (43 P.S. § 933.3(e)) 15
A CT 72: C OLLABORATION AND C OOPERATION • Information sharing between agencies within L&I: • Bureau of Labor Law Compliance (BLLC) • Bureau of Workers’ Compensation (BWC) • Office of Unemployment Compensation Tax Services (OUCTS) • Violations of workers’ compensation laws or unemployment compensation laws result in penalties associated with repayment of taxes and other legal obligations • Act 72 claims/investigations derived from this information results in a separate and distinct investigation, potential for additional penalties 16
A CT 72 F INES AND P ENALTIES • Criminal penalties (43 P.S. § 933.5) • (a) GRADING. ‐‐ An employer, or officer or agent of an employer, who 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. • (b) SUMMARY OFFENSE. ‐‐ An employer, or officer or agent of an employer, who negligently fails to properly classify an individual as an employee under section 4(a) commits a summary offense and shall, upon conviction, be sentenced to pay a fine of not more than $1,000. Evidence of a prior conviction under this subsection shall be admissible as evidence of intent under subsection (a). 17
A CT 72 F INES AND P ENALTIES ( CONTINUED ) • Administrative Penalties (43 P.S. § 933.6): • When the Secretary finds that a person has violated this act, the Secretary may assess and collect civil penalties of not more than $1,000 for the first violation, and not more than $2,500 for each subsequent violation. • Factors considered include: • History of previous violations • Seriousness of violation • Good faith of employer • Size of employer’s business • Administrative Penalty amounts collected are directed to Unemployment Compensation Administration Fund or Workers’ Compensation Administrative Fund (43 P.S. § 933.12) 18
A CT 72 F INES AND P ENALTIES ( CONTINUED ) Shut ‐ Down Orders under the Act (43 P.S. § 933.7) • The process for the Secretary to shut down a job site is as follows: • (1) the Department must receive information that there is a potential violation; • (2) the Bureau must conduct an investigation into the allegation; • (3) the Department must issue an administrative Order to Show Cause; • (4) the employer is afforded 20 days to file an answer in writing; • (5) the employer is then provided notice and a hearing is conducted; • (6) if evidence presented at the hearing establishes the finding of a violation, the Secretary must petition a court of competent jurisdiction for an Order; and • (7) the employer must be served the Order so it may take effect. 19
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