The Construction Workplace Misclassification Act applies to any construction – defined as a direction, reconstruction, demolition, alteration, modification, custom fabrication, building, assembling, site preparation and repair work done on any real property or premises under contract – whether or not the work is for a public body and paid for from public funds. 40 3PS section 933.1: “For purposes of Worker’s Compensation, unemployment compensation and in proper classification of employees provided herein, and the individual who performs services in the construction industry for remuneration is an independent contractor ONLY IF:
- The individual has a written contract to perform such services.
- The individual is free from control or direction over the performance of such services both under the contract of service and in fact.
- As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.”
Moreover, the CWM also requires that the individual incur a profit or loss from the work being performed; performs the work through a business in which the individual has a proprietary interest; and the individual maintains a separate business location from the person for whom the services are being performed. Finally, the individual must also maintain their own policy of liability insurance. If any of the foregoing factors are not satisfied, the individual is an employee and not an independent contractor for purposes of the Worker’s Compensation act. 40 3PS section 933.3.
An entity that misclassifies workers for the purpose of avoiding payment of Worker’s Comp. insurance, unemployment compensation insurance, or for other types of pecuniary gain is in violation of this law. Such violations are a criminal offense.
In a current case, William Barron is clearly and unequivocally NOT an independent contractor. There was no written contract for his services; he was not free from the control of Michael Martin in any sense; he was not invested in the project such as to realize a profit or loss from performing the services; he did not maintain his own separate business and he did not maintain his own insurance policy.
In determining whether an individual is an employee solely with consideration of the terms of the Worker’s Compensation Act, the form of payment is not determinative. The primary factor is “control”. Mr. Martin clearly had control over the claimant’s work. He had the ability to hire and fire the claimant, which he states he did on multiple occasions. He directed the claimant to wear to work and what to do. He provided the flooring materials for the seas which he obtained from harp at flooring) as well as the larger tools and equipment needed to perform the job. Mr. Martin was responsible for transporting all of these materials and tools to the job site.
Upon consideration of all of the factors outlined in the Pennsylvania Worker’s Compensation Act and the construction workplace misclassification act, it is inescapable the claimant was an employee of finest flooring/Michael Martin.
Moreover, it is equally clear that Heart Pat flooring is a statutory employer pursuant to section 302 (A) print the seas two) of the act, 70 7PS section 462.
A person who contracts with another to have work performed of a kind which is a regular or recurrent part of the business, occupation, profession or trade of such person shall be deemed a contractor, and such other person a subcontractor. As early as 1930 the Supreme Court of Pennsylvania developed a five-part test in McDonald the Levinson steel company, 150 3A. 424 (PA 1930).
- The “statutory employer” enters a contract with the owner of land or one in possession of the owner;
- The premises are occupied or under the control of the contractor seeking;
- A subcontract made by the contractor:
- Part of the contractor’s regular business is interested in the subcontractor under the contract and;
- An employee of the subcontractor is injured on the premises.
Where this five-part test is satisfied, the statutory employer/contractor will be liable for the payment of Worker’s Compensation benefits if the subcontractor did not maintain a policy of insurance. Here, all of the criteria were satisfied. Heart Pat flooring entered into the contract to sell and install flooring materials for the customer in Conshohocken. For purposes of that installation project, the contractor was in control of those premises. The contractor entered into a subcontract with the finest flooring to provide the installation of the materials provided by the contractor. This was a regular part of our pet floorings business. An employee, William Barron, was hurt while performing work on those premises. All of the criteria of a statutory employer are clearly satisfied.