Bureau of Labor Law Compliance Enforcement of the Construction - - PowerPoint PPT Presentation

1

Bureau of Labor Law Compliance

Enforcement of the Construction Workplace Misclassification Act (Act 72)

2

Prevailing Wage Minimum Wage and Overtime Child Labor Wage Payment Apprenticeship and Training Seasonal Farm Underground Utility Line Protection (PA One Call) Medical Pay Personnel File Industrial Homework Equal Pay Prohibition of Excessive Overtime in Health Care (Act 102) Construction Workplace Misclassification (Act 72)

SCOPE OF BUREAU OF LABOR LAW COMPLIANCE’S ENFORCEMENT

3

THE BUREAU’S COMPLAINT PROCESS

4

WAYS TO FILE COMPLAINTS

• 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

5

CONSTRUCTION WORKPLACE MISCLASSIFICATION (ACT 72)

COMPLAINT FORM

6

WHO CAN FILE COMPLAINTS

• 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”

7

SUBMITTING A CASE

• After a case is submitted, manual complaints are

logged into the computer system by clerical staff, and

• nline 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

8

BUREAU INVESTIGATIONS

• 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,

• vertime or minimum wage, and Apprenticeship and

Training issues

9

BLLC INVESTIGATIONS (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?

10

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

11

APPLICATION OF ACT 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)

12

WHISTLEBLOWER DISCRIMINATION PROTECTION

• 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

13

ACT 72 CRITERIA

• 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))

14

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
• r 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

15

FACTORS NOT CONSIDERED UNDER ACT 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,

• ccupation, 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))

16

ACT 72: COLLABORATION AND COOPERATION

• 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

17

ACT 72 FINES AND PENALTIES

• 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

• ffense 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).

18

ACT 72 FINES AND PENALTIES (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)

19

ACT 72 FINES AND PENALTIES (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.

20

STATISTICS AND COLLECTIONS

21

ACT 72

• Growing Act 72 enforcement
• Since 2015, the Bureau began a working relationship with the

Unemployment Compensation Tax office.

• To date, OUCTS has forwarded over 140 entities potentially in

violation of Act 72, which the Bureau is pursuing.

• Information sharing with BWC is in infancy, but expected to grow.
• No shut‐down orders issued to date
• From 2011 – 2014, the Bureau of Labor Law Compliance

collected $12,700.

• In 2015, the Bureau collected $217,450 in administrative

penalties

• In 2016, the Bureau collected $383,033 in administrative

penalties

22

CONTACT THE BUREAU

• Altoona District Office

1130 12th Avenue, Suite 200 Altoona, PA 16601 814‐940‐6224 or 1‐877‐792‐8198

• Harrisburg District Office

1301 Labor & Industry Building 651 Boas Street Harrisburg, PA 17121 717‐787‐4671 or 1‐800‐932‐0665

• Philadelphia District Office

110 North 8th Street, Suite 203 Philadelphia, PA 19107 215‐560‐1858 or 1‐877‐817‐9497

• Pittsburgh District Office

301 5th Avenue, Suite 330 Pittsburgh, PA 15222 412‐565‐5300 or 1‐877‐504‐8354

• Scranton District Office

201 B State Office Building 100 Lackawanna Avenue Scranton, PA 18503 570‐963‐4577 or 1‐877‐214‐3962

• Email the Bureau of Labor Law Compliance at

RA‐LI‐SLMR‐LLC@pa.gov

23

CONSTRUCTION WORKPLACE MISCLASSIFICATION (ACT 72)

JOBSITE POSTER