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.