SB 72 — 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
 1   Amending the act of October 13, 2010 (P.L.506, No.72), entitled
 2      "An act providing for the criteria for independent
 3      contractors in the construction industry and for the powers
 4      and duties of the Department of Labor and Industry and the
 5      Secretary of Labor and Industry; and imposing penalties,"
 6      further providing for definitions, for improper
 7      classification of employees and for criminal penalties;
 8      providing for private right of action; and further providing
 9      for administrative penalties, for retaliation for action
10      prohibited, for availability of information, for use of
11      penalty funds and for funding.
12      The General Assembly of the Commonwealth of Pennsylvania
13   hereby enacts as follows:
14      Section 1.    Section 2 of the act of October 13, 2010
15   (P.L.506, No.72), known as the Construction Workplace
16   Misclassification Act, is amended by adding definitions to read:
17   Section 2.    Definitions.
18      The following words and phrases when used in this act shall
19   have the meanings given to them in this section unless the
20   context clearly indicates otherwise:
21      * * *
22      "Debar."    Action taken by the secretary to prohibit a
 1   contractor, subcontractor or person from contracting for or
 2   participating in contracts for public work projects and other
 3   State procurement contracts for a specified period not to exceed
 4   three years for the first offense and five years for a second or
 5   subsequent offense. The debarment:
 6          (1)   Shall cover future projects and contracts and
 7      current projects and contracts entered into but on which the
 8      debarred contractor, subcontractor or person's work has not
 9      begun as of the effective date of the debarment.
10          (2)   Shall include all divisions or other organizational
11      elements of a contractor or subcontractor unless limited by
12      the terms of the debarment to specific divisions or
13      organizational elements and shall apply to any other entity
14      or organization in which the debarred contractor,
15      subcontractor or person has an ownership interest.
16          (3)   May apply to an affiliate or other person associated
17      with the debarred contractor, subcontractor or person if the
18      information received by the secretary under section 4(c)(1)
19      or the investigation under section 4(c)(1) demonstrates that
20      the affiliate or other person supplied labor for the
21      construction project knowing the workers were being
22      misclassified. The affiliate or other person must be
23      specifically named as a party in an order to show cause under
24      section 4 with the same procedural rights and obligations as
25      other parties subject to an order to show cause under this
26      act. An affiliate or other person under this paragraph shall
27      include any owner, principal, partner or officer of the
28      contractor, subcontractor or person, and any business entity
29      in which the contractor, subcontractor or person has an
30      interest as owner, principal, parent or subsidiary of the

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 1      entity.
 2      * * *
 3      "Public work."      The term shall have the meaning given to it
 4   in section 2(5) of the act of August 15, 1961 (P.L.987, No.442),
 5   known as the Pennsylvania Prevailing Wage Act.
 6      * * *
 7      Section 2.      Section 4(c)(2), (d) and (e) of the act are
 8   amended to read:
 9   Section 4.     Improper classification of employees.
10      * * *
11      (c)   Order to show cause.--
12            * * *
13            (2)   A person served with an order to show cause shall
14      have a period of [20] 10 days from the date the order is
15      served to file an answer in writing.
16            * * *
17      (d)   Enforcement.--
18            (1)     If, subsequent to issuing an order to show cause
19      under subsection (c), the secretary finds probable cause that
20      an employer has [committed a criminal violation of this act,
21      the secretary shall refer the matter to the Office of
22      Attorney General for investigation or] violated this act, the
23      secretary shall impose administrative penalties under section
24      6.
25            (2)   In addition to imposing penalties under paragraph
26      (1), the secretary may refer the matter to the Attorney
27      General for criminal investigation. The secretary shall make
28      a referral if the employer has previously been adjudicated to
29      be in violation of this act. The Attorney General has
30      jurisdiction under section 5 to initiate an investigation or

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 1      prosecution of criminal violations of this act regardless of
 2      whether a referral has been made.
 3      (e)   Acting in concert with other parties.--A party that does
 4   not meet the definition of "employer" in section 2, but which
 5   [intentionally] contracts with an employer [knowing the employer
 6   intends to misclassify] to supply labor for construction knowing
 7   the employer will misclassify the supplied employees in
 8   violation of this act, shall be subject to the same penalties,
 9   remedies or other actions as the employer found to be in
10   violation of this act.
11      * * *
12      Section 3.     Section 5(a) of the act is amended and the
13   section is amended by adding a subsection to read:
14   Section 5.     Criminal penalties.
15      (a)   Grading.--[An employer, or officer or agent of an
16   employer, that intentionally violates section 4(a) commits:
17            (1)   A misdemeanor of the third degree for a first
18      offense.
19            (2)   A misdemeanor of the second degree for a second or
20      subsequent offense.] An employer, or officer or agent of an
21      employer, who knowingly violates section 4(a) commits:
22            (1)   A misdemeanor of the second degree if the employer
23      has no prior offense under section 4(a).
24            (2)   A misdemeanor of the first degree if the employer
25      has one prior offense under section 4(a).
26            (3)   A felony of the third degree if the employer has two
27      or more prior offenses under section 4(a).
28      * * *
29      (d)   Definitions.--As used in this section, the following
30   words and phrases shall have the meanings given to them in this

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 1   subsection unless the context clearly indicates otherwise:
 2      "Prior offense."     A conviction of a violation of section 4,
 3   if the judgment of sentence was imposed before the defendant is
 4   sentenced for a separate violation of section 4.
 5      Section 4.     The act is amended by adding a section to read:
 6   Section 5.1.    Private right of action.
 7      (a)   Commencement.--An employee who has been misclassified in
 8   violation of this act, or has been discharged, threatened or has
 9   otherwise suffered retaliation, discrimination or other adverse
10   action as a result of participating in an investigation or
11   reporting a violation of this act may bring a private right of
12   action in a court of common pleas in accordance with established
13   civil procedures of this Commonwealth.
14      (b)   Time.--The action must be brought within three years
15   from the date that the employee knew of the violation,
16   retaliation or discrimination.
17      (c)   Relief.--If an employee prevails in an action commenced
18   under this section, the employee shall be entitled to the
19   following relief:
20            (1)   Reinstatement of the employee without a loss in
21      seniority status, if applicable.
22            (2)   Restitution equal to three times the amount of the
23      employee's wages and fringe benefits calculated from the date
24      of the violation, retaliation or discrimination.
25            (3)   Reasonable attorney fees and costs of the action.
26            (4)   Other legal and equitable relief the court deems
27      appropriate to make the employee whole.
28      Section 5.     Sections 6(a) and 10(a) of the act are amended
29   and the sections are amended by adding subsections to read:
30   Section 6.     Administrative penalties.

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 1      (a)   General rule.--When the secretary finds that a person
 2   has violated this act, the secretary [may assess]:
 3            (1)   Shall assess and collect [civil] administrative
 4      penalties of not more than $1,000 for the first violation,
 5      and not more than $2,500 for each subsequent violation.
 6            (2)   May order a financial audit or tax audit of the
 7      person.
 8      * * *
 9      (c)   Intentional violation.--If the secretary determines that
10   a violation of this act was intentional, the secretary shall
11   debar the employer.
12   Section 10.    Retaliation for action prohibited.
13      (a)   General rule.--It shall be unlawful for an employer, or
14   officer or agent of an employer, to [discriminate in any manner
15   or take adverse action against any person in retaliation for
16   exercising rights protected under this act. Rights protected
17   under this act include, but are not limited to, the right to
18   file a complaint or inform any person about an employer's
19   noncompliance with this act.] discharge, threaten or otherwise
20   retaliate or discriminate in any manner against an employee
21   regarding compensation or other terms or conditions of
22   employment because the employee:
23            (1)   participates in an investigation, hearing or inquiry
24      by the secretary or any governmental authority; or
25            (2)   reports or makes a complaint regarding the violation
26      of this act to a construction industry employer or any
27      governmental authority.
28      (a.1)   Action.--An employee who suffers retaliation or
29   discrimination in violation of this section may bring a private
30   right of action under section 5.1.

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 1      * * *
 2      Section 6.     Sections 11, 12 and 17 of the act are amended to
 3   read:
 4   Section 11.     Availability of information.
 5      The department shall create a poster [for job sites] which
 6   outlines the requirements and penalties under this act and shall
 7   make the poster available on its Internet website. Every
 8   employer subject to this act shall keep a summary of this act
 9   and any regulations issued under this act applicable to the
10   employer, posted in a conspicuous place where employees normally
11   pass and can read it, both on job sites and in all places of
12   business. At the discretion of the secretary, a toll-free
13   hotline telephone number may be established to receive alleged
14   violations.
15   Section 12.     Use of penalty funds.
16      [Any sum collected as a penalty under:
17             (1)   Sections 6, 7 and 9 for a violation of section 4(a)
18      (1) shall be paid into the Workers' Compensation
19      Administration Fund.
20             (2)   Sections 6, 7 and 9 for a violation of section 4(a)
21      (2) shall be paid into the Special Administration Fund
22      created under section 601.1 of the Unemployment Compensation
23      Law.
24             (3)   Section 9 for a violation of any other provision of
25      this act shall be divided equally between the Workers'
26      Compensation Administration Fund and the Special
27      Administration Fund.] Notwithstanding any other provision of
28      law to the contrary, any sum collected as a penalty,
29      recovered attorney fees or costs associated with
30      investigation and enforcement actions shall be deposited into

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 1      a restricted revenue account in the General Fund to be used
 2      for future enforcement of this act.
 3   Section 17.   Funding.
 4      (a)   Enforcement.--The department shall not be required to
 5   enforce this act until adequate funding is appropriated.
 6      (b)   Recovery of fees and costs.--The department, Office of
 7   Attorney General or a district attorney's office shall be
 8   entitled to recover attorney fees and costs associated with the
 9   investigation of construction worker misclassification from
10   employers who violate the provisions of this act.
11      Section 7.   This act shall take effect in 60 days.




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