Independent contractors

Act 72 of 2010, § 3, under CONSTRUCTION WORKPLACE MISCLASSIFICATION ACT - ENACTMENT.

Act 72 of 2010, § 3

Section 3. Independent contractors.

(a) General rule.--For purposes of workers' compensation, unemployment compensation and improper classification of employees provided herein, an individual who performs services in the construction industry for remuneration is an independent contractor only if:

(1) The individual has a written contract to perform

such services.

(2) The individual is free from control or direction

over performance of such services both under the contract of

service and in fact.

(3) As to such services, the individual is customarily

engaged in an independently established trade, occupation,

profession or business.

(b) Criteria.--An individual is customarily engaged in an independently established trade, occupation, profession or business with respect to services the individual performs in the commercial or residential building construction industry only if:

(1) The individual possesses the essential tools,

equipment and other assets necessary to perform the services

independent of the person for whom the services are

performed.

(2) The individual's arrangement with the person for

whom the services are performed is such that the individual

shall realize a profit or suffer a loss as a result of

performing the services.

(3) The individual performs the services through a

business in which the individual has a proprietary interest.

(4) The individual maintains a business location that is

separate from the location of the person for whom the

services are being performed.

(5) The individual:

(i) previously performed the same or similar

services for another person in accordance with paragraphs

(1), (2), (3) and (4) while free from direction or

control over performance of the services, both under the

contract of service and in fact; or

(ii) holds himself out to other persons as available

and able, and in fact is available and able, to perform

the same or similar services in accordance with

paragraphs (1), (2), (3) and (4) while free from

direction or control over performance of the services.

(6) The individual maintains liability insurance during

the term of this contract of at least $50,000.

(c) Factors not to be considered.--The failure to withhold Federal or State income taxes or pay unemployment compensation contributions or workers' compensation premiums with respect to an individual's remuneration shall not be considered in determining whether the individual is an independent contractor for purposes of the Workers' Compensation Act or the Unemployment Compensation Law.

(d) Workers' compensation.--

(1) An individual who is an independent contractor as

determined under this section is not an employee for purposes

of the Workers' Compensation Act. For purposes of this

section, each employment relationship shall be considered

separately.

(2) Nothing in this act shall be construed to affect

section 321(2) of the Workers' Compensation Act.

(e) Unemployment compensation.--

(1) For purposes of section 4(l)(2)(B) of the

Unemployment Compensation Law, an individual is customarily

engaged in an independently established trade, occupation,

profession or business with respect to services the

individual performs in the construction industry only if the

criteria in subsection (b) are satisfied.

(2) Except as provided in paragraph (1), nothing in this

act shall be construed to affect any exclusion from

"employment" as defined in the Unemployment Compensation Law.