NFIB

The state House Labor Relations Committee on Tuesday passed an amended version of HB 2400 -- narrowing its scope exclusively to businesses in the residential and commercial construction industry. The bill as amended passed 20-9. A floor vote is expected in June. The Department of Labor and Industry vowed to work with other lawmakers to expand the scope of the bill to cover all occupations.

Despite changes to the bill, NFIB still opposes the measure as it prohibits independent contractors from hiring sub-contractors; makes it easier for organized labor to intimidate and harass non-union construction companies; and perpetuates current ambiguity in the law as to whether an individual is an employee or an independent business. If enacted, HB 2400 will force small-business owners to spend costly hours with lawyers and judges rather than working on projects and creating jobs. As amended, HB 2400:

1. Prohibits independent contractors from hiring sub-contractors. This has nothing to do with misclassification. It's intended to harass and intimidate legitimate small independent contractors.
2. Reduces the standard used to determine criminal acts from "beyond a reasonable doubt" to "clear and convincing evidence." This standard is common practice in civil litigation but the common practice in criminal cases is to determine guilt beyond a reasonable doubt.
3. Includes harsh criminal and civil penalties for small-business owners who make a good-faith effort to comply with the law. These severe penalties are inconsistent with existing penalties for violations of the unemployment or workers' compensation laws. Further, small-business owners would be under constant threat of costly litigation and harassment by competitors, unions and plaintiffs lawyers looking to make a quick dollar.
4. Denies a construction firm the right to seek guidance from the Department or the Secretary as to proper treatment of an individual. A construction firm interested in making a good-faith effort to comply with the Act has no opportunity to seek guidance from the department as to the proper treatment of an individual - whether an employee or independent contractor.
5. Makes it virtually impossible for construction firms to prove innocence. Despite having all of the supporting documents, a contractor still could be found to be an employer because "free from control or direction" can change in a moment. There is no affirmative defense for a homeowner or business.

Don't delay! Contact your state lawmakers today to warn them of the costly effect this legislation would have on your business. NFIB has made it fast and easy for you to communicate your message to your elected officials. Please feel free to personalize your emails and be sure to include information about your business and how this issue may uniquely impact you. If you need assistance, please contact us at NFIB/Pennsylvania at 717-232-8582.