Posted over 2 years ago. Applies to Pennsylvania, 1 helpful vote
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The effect of this law is to ensure that individuals on a construction job are properly classified as either employees or independent contractors. This Act imposes harsh penalties upon employers who avoid paying into PA's worker and unemployment compensation funds.
The Act requires independent contractors: (1) to have a written contract with the general contractor; (2) be free from control or direction in the performances of such services called for in the contract; (3) meet the Act's criteria to be considered independently established in the trade for which he/she is hired; (4) previously performed similar services and to hold him/herself out for hire to other persons/companies; and (5) maintain at least $50,000 liabiliity insurance for the term of the contract.
Failure to comply with the Act may result in a variety of penalties including civil penalties of up to $2,500 for each violation; stop work orders; and imposition of a probationary period under the Act until compliance is established.