BUREAU OF LABOR LAW COMPLIANCE WWW.DLI.STATE.PA.US 800-932-0665

1. BUREAU OF LABOR LAW COMPLIANCE WWW.DLI.STATE.PA.US 800-932-0665

2. Presentation Topic • "The Top 3 Offenses in the Construction Industry – • Misconceptions about the law • How to avoid getting cited • Misclassification, Wage Issues, Labor Standards • Knowledge is power • FOLLOW THE LAW!

3. Scope of Bureau of Labor Law Enforcement

4. Laws that may Effect the Construction Industry • Prevailing Wage Law • Misclassification of Construction Employees (Act 72) • Wage Payment Collection • Minimum Wage/Overtime • Apprenticeship and Training • Child Labor Act • Underground Utility Line Protection (One Call/811) • Act 127 *DGS*

5. Prevailing Wage Law The Department of Labor and Industry, through the Bureau of Labor Law Compliance, determines prevailing wage rates for the construction industry and enforces the rates and classifications under heavy, highway and building construction projects of $25,000 or more when public funds are involved. The Department also determines the prevailing minimum wage rates and employee benefits for specific localities and classifications. The Prevailing Wage Regulations allow the Secretary of Labor and Industry to consider collective bargaining agreements and other types of data for purposes of determining the wage rates.

6. Prevailing Wage issues • Who is covered? • Includes laborer, mechanic, skilled and semiskilled laborer and apprentices employed by any contractor or subcontractor and engaged in the performance of services directly upon the public work project, regardless of whether their work becomes a component part thereof. • Does not include material suppliers or their employees who do not perform services at the job site. 43 P.S. § 165-2(7).

7. Workers Covered by Prevailing Wage Contractors Subcontractors Owner-operators Apprentices All persons performing work on a prevailing wage project where rate rates have been issued by the Department for specific crafts

8. More workers covered by Prevailing Wage Workers performing testing and balancing (TAB) of air handling systems Surveyors Truck drivers hauling materials around a jobsite and from an adjacent borrow pit to the jobsite

9. Workers not covered by Prevailing Wage Material handlers dropping off supplies to the jobsite Architects, engineers, or individuals performing geotechnical testing and inspection services Workers performing off-site work Non-working supervisors

10. Apprentices in Prevailing Wage Must be registered with state Must be paid percentage of prevailing wage according to program standards established and approved by State Council Must be kept in proper ratio to journeypersons at all times.

11. VALID subcontractors on Prevailing Wage sites Subcontractor must fill out certified payrolls on a weekly basis If owner is working on job, he/she must be on certified payrolls in the correct classification of work being performed on site Act 72-Construction Workplace Misclassification Act - Violation if an employer fails to classify an individual as employee

12. Types of Prevailing Wage Violations

13. Intentional vs Unintentional Prevailing Wage violations • Section 11(h)-substantial evidence of intent includes either of the following: • Any acts of omission or commission done willfully or with a knowing disregard of the rights of workmen resulting in the payment of less that the prevailing wage rates; or • There is a determination of an unintentional violation, and the contractor does not adjust the underpayment.

14. Intentional violations of Prevailing Wage Laws Payment based on ratio of laborer-to-craft time Misclassifying workers as laborers for performing craft work Underreporting hours Violating apprentice to journeyman ratio Improper fringe benefit deduction Failure to report workers on certified payrolls Requiring kickbacks from workers

15. Evidence of Intentional Violations Falsified certified payrolls Timecards and pay statements do not match certified payrolls Workers told to lie to bureau investigators Employer is familiar with the act and its regulations (prior prevailing wage work/prior experience with the Bureau)

16. Act 72 ACT 72 (43 P.S. §§ 933.1 -- 933.17)The Construction Workplace Misclassification Act (Act 72) Effective on February 10, 2011 Establishes a definition of "independent contractor“ in construction for purposes of workers' compensation, unemployment compensation, and worker classification.

17. Application of Act 72 • Act 72 applies to any construction • Includes private construction and public work construction (whether or not work is for a public body or paid for from public funds) • Enforcement • Attorney General (criminal penalties) • District Attorneys (criminal penalties) • Secretary of Labor & Industry (stop work orders/administrative penalties) • Also applies in WC & UC proceedings

18. Act 72 Criteria The Bureau investigates complaints and looks for a number of criteria established by the Act. Bureau interviews workers, employers, and any interested parties Complaint can be initiated by misclassified worker, or other sources

19. Act 72 criteria (continued) The Act states that to be a valid contractor, a person must have a written contract with the business or person you work for, have his or her own tools, and have a proprietary interest in a business.

20. You may be property classified contractor if.. • You have a written contract with the business or person you work for. • You control and direct your own work. • You possess the tools that are needed to perform your work. • Your arrangement with the business you work for allows you to earn a profit or suffer a loss from your work. • You are an owner or partner in your own business. • Your business location is separate from the location of the business or person which hired you to perform the construction. • You previously worked as an independent contractor, or you hold yourself out to the public as available and able to work as an independent contractor. • You have liability insurance of at least $50,000.

21. You may not be correctly classified contactor if… Any of the provisions on the previous slide are not met During investigations, Bureau personal look into each of the provisions established by Act 72

22. Act 72 Fines and Penalties • Administrative Penalties: • When the secretary finds that a person has violated this act, the secretary may assess and collect civil penalties of not more than $1,000 for the first violation, and not more than $ 2,500 for each subsequent violation.

23. Act 72 fines and penalties continued • Criminal penalties • (a) GRADING.-- An employer, or officer or agent of an employer, that intentionally violates section 4(a) commits: • (1) A misdemeanor of the third degree for a first offense.   • (2) A misdemeanor of the second degree for a second or subsequent offense. (b) SUMMARY OFFENSE.-- An employer, or officer or agent of an employer, that negligently fails to properly classify an individual as an employee under section 4(a) commits a summary offense and shall, upon conviction, be sentenced to pay a fine of not more than $ 1,000. Evidence of a prior conviction under this subsection shall be admissible as evidence of intent under subsection (a).

24. Wage Payment Collection • Wage Payment Collection Law enforcement: • Workers must receive wages and all appropriate fringe benefits for all time worked. • The Bureau of Labor Law Compliance investigates upon complaint or through its own investigation.

25. Minimum Wage Law/Overtime Employers must pay employees at least the state mandated minimum wage for time worked, and overtime when employees are told or permitted to work more than 40 hours within a one-week period defined by the employer The Bureau performs audits when investigating these matters

26. Apprenticeship and Training The Pennsylvania Department of Labor & Industry works to promote apprenticeship and training, reaches out to businesses to write new programs, and ensures quality and compliance with standards are being adhered to

27. Child Labor Act The Bureau investigates to ensure proper working papers are on file when minors under the age of 18 are employed. There are also stringent rules on the work minors can perform. Minors, in most circumstances, should not be on construction projects or highways.

28. Underground Utility Line Protection Act On both private and public work sites, contractors must call PA ONE CALL at 811 prior to excavation or demolition to ensure property facilities are marked by owners The Bureau investigates and fines or warns appropriate entities in violation

29. Public Works Verification ActSB 637 (Act 127) Not covered by Labor Law Compliance Effective January 1, 2013 Enforcement: Department of General Services As a precondition to being awarded a contract for public work, contractor must file form acknowledging responsibility under and compliance with act with public body Subcontractor must also file verifications Contractors and subcontractors must e-verify employment eligibility of new employees Penalties: warning letter, debarments, civil penalties

31. BLLC Investigations • Bureau investigators identify themselves • Make known that they are doing a “site visit” to ensure compliance with the Prevailing Wage Act, Act 72, Wage laws, and appropriate labor standards • Ask the name of employee • Ask the employer’s name • Classification of employee • What is the rate of pay?

32. Investigations (continued) Bureau investigators may go to job sites to inspect for potential child labor violations, PA One Call matters, overtime or minimum wage, Apprenticeship and Training issues, and Act 72 compliance Investigations may also commence upon a complaint Bureau HQ assigns cases to field offices after complaints are filed, or information is supplied of potential violation

33. The Bureau’s Complaint Process • Complaints to the Bureau must be in writing. • Complaints under Act 102, Act 72, Prevailing Wage, Minimum Wage and Overtime, and Child Labor spawn audits and can be kept anonymous. • Complaints under the Wage Payment and Collection Act are specific to the worker being underpaid, and are not anonymous in nature.

34. Ways to File Complaints • The Bureau can accept both paper and online submissions. • These forms are in both English and Spanish • The Bureau’s website includes links to the forms and web applications, in which complaints can be inputted directly by employees. • PA was one of the first states to allow online complaints to be filed in the early 2000’s.

35. Complaint Forms

36. Complaint Forms(continued)

37. Submitting a Case After a case is submitted, manual complaints are logged into our system by clerical staff, and online submissions are automatically placed into a queue. Case is assigned to one of five district offices determined by geographic location of company or work headquarters.

38. Complaint Process

39. Top issues Labor Law Compliance observes Act 72 misclassification on both public and private construction sites Classification issues on prevailing wage sites, such as ensuring proper rates are being paid to correct craft Minors under 18 performing tasks prohibited under Act and Regulations

40. How to Avoid Violations PAY WORKERS PROPERLY PAY OVERTIME AND MINIMUM WAGE Do not make minors under 18 perform tasks unable to perform under Act Do not misclassify employees as contractors Do not intentionally circumvent Bureau laws, refuse to cooperate with investigations, or threaten/punish employees who cooperate

41. STATISTICS AND COLLECTIONS

42. CONTACT THE BUREAU Altoona District Office1130 12th Avenue, Suite 200Altoona, PA 16601814-940-6224 or 1-877-792-8198 Harrisburg District Office1301 Labor & Industry Building651 Boas StreetHarrisburg, PA 17121717-787-4671 or 1-800-932-0665 Philadelphia District Office110 North 8th Street, Suite 203Philadelphia, PA 19107215-560-1858 or 1-877-817-9497 Pittsburgh District Office301 5th Avenue, Suite 330Pittsburgh, PA 15222412-565-5300 or 1-877-504-8354 Scranton District Office201 B State Office Building100 Lackawanna AvenueScranton, PA 18503570-963-4577 or 1-877-214-3962 Email the Bureau of Labor Law Compliance at RA-LI-SLMR-LLC@pa.gov

43. Remember… FOLLOW THE LAW!!! • How do you avoid being cited by the Bureau of Labor Law Compliance???

44. QUESTIONS