Contact: Trevor Monk, dlipress@pa.gov
Harrisburg, PA –The Pennsylvania Department of Labor & Industry (L&I) has fined a Cambria County-based drywall company $32,250 for misclassifying 43 construction workers, a violation of the Pennsylvania Construction Workplace Misclassification Act (Act 72). Worker misclassification occurs when an employer wrongly classifies a worker as an independent contractor instead of an employee, denying them essential employee rights and benefits. L&I is urging employers to familiarize themselves with Act 72 to ensure full compliance and avoid costly penalties.
L&I's Office of Unemployment Tax Services discovered the misclassification during a routine compliance audit and referred the matter to L&I's Bureau of Labor Law Compliance (BLLC) for investigation. BLLC concluded that Keystone Drywall misclassified 43 construction workers as independent contractors, in violation of Act 72.
"Misclassification jeopardizes workers' access to the unemployment and workers' compensation benefits to which they are entitled, in addition to depriving them of many other rights they are entitled to under the law," L&I Secretary Nancy A. Walker said. "At L&I, we collaborate across bureaus to act when we see evidence of worker misclassification. We are also taking steps to be transparent about our commitment to protecting workers from misclassification – and the potential penalties for violating Act 72 – because businesses that do not undercut the competition by breaking Pennsylvania labor laws deserve a level playing field."
Act 72, which went into effect in 2011, prevents construction employees from losing protections and benefits which often occurs when employers misclassify employees as independent contractors. L&I may assess civil penalties of up to $1,000 for the first violation, and up to $2,500 for each subsequent violation.
Since 2011, L&I has cited 927 construction contractors for violations of Act 72 and collected more than $3 million in fines. As of October 1, 2023, BLLC has collected $301,454 in Act 72 fines, compared to $202,942 within the same timeframe in 2022 -- a 33% increase.
How to Submit a Complaint
L&I's Bureau of Labor Law Compliance responds to complaints filed by members of the public who suspect violations of the Construction Workplace Misclassification Act, Child Labor Act, and other Pennsylvania labor laws. Anyone can file a complaint on L&I's website using an online submission form.
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