OWM Newsletter
February, 2011
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Attorney Spotlight James C. Kovaleski, Esq., is an associate attorney with OWM Law concentrating his practice in the Estate Planning and Administration, Tax Law, Business Planning and Real Estate areas. Mr. Kovaleski is active in the Phoenixville area, working out of OWM Law’s Phoenixville office, serving on the Boards for various non-profits and living in the Borough with his wife and daughter.  Phone: 610-917-9347 Fax: 610-917-9348 Email: jkovaleski@owmlaw.com The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

Pennsylvania's New Independent Contractor Law

Less than two years after the Pennsylvania Home Improvement Consumer Protection Act came into effect, construction companies and contractors in Pennsylvania now have a new law to comply with in providing construction services within the Commonwealth.  On February 10, 2011, the Construction Workplace Misclassification Act became effective.

Under this new Act, construction companies who wish to use independent contractors must make sure that those independent contractors meet several criteria found in the Construction Workplace Misclassification Act.   The criteria found in the Act are harder to meet than the criteria published by the IRS.

In the event that the criteria for an independent contractor cannot be met, the person providing the services will be deemed an employee, and the construction company must provide workers' compensation and unemployment compensation coverage, along with treating the person as an employee, rather than an independent contractor. 

An individual hired to perform services for remuneration in the construction industry will automatically be treated as an employee of the construction business, and not as an independent contract, for Pennsylvania Workers' Compensation and Unemployment Compensation purposes, unless the following criteria are met:

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;
3. The individual possesses the essential tools, equipment and other assets necessary to perform the services;
4. The individual performing the services has the potential to realize a profit or suffer a loss as a result of performing the services (i.e., not receiving a salary;
5. The individual performs the services through a business in which the individual has proprietary interest;
6. The individual maintains a business location that is separate from the location of the person for whom services are being performed;
7. The individual must have either performed similar services for other parties or holds himself out to perform those services for other parties; and
8. The individual maintains liability insurance during the term of the contract of at least $50,000.

Failure to properly classify an employee may result in the issuance of a stop work order, which would prevent the construction company from continuing to provide its services.  As well, an employer, officer, or agent of an employer, which intentionally violates portion of the Act may face criminal charges and civil fines.

Construction companies in the Commonwealth must comply with the Construction Workplace Misclassification Act and make sure that employees are properly classified and that, if they are using independent contractors, that the independent contractors meet all of the criteria found in the Act.

Update on the Home Improvement Consumer Protection Act

Since July 1, 2009, contractors performing home improvement services within the Commonwealth have been subject to the Home Improvement Consumer Protection Act (HICPA).  Contractors must register with the Attorney General's office.  Those contractors that registered when the Act became effective will need to reregister this year, as the registration was for a two (2) year period. 

In addition, contractors must have a contract which is compliant with HICPA.  In the event that it does not comply, the contract may be voidable by the homeowner.

Homeowners can go to the Pennsylvania Attorney General’s website  (http://www.attorneygeneral.gov) to see if the contractor they are considering hiring is registered under HICPA and find out additional information regarding their rights under HICPA.  Contractors can go there to register pursuant to HICPA.

Construction companies in the Commonwealth must comply with the Construction Workplace Misclassification Act and make sure that employees are properly classified and that, if they are using independent contractors, that the independent contractors meet all of the criteria found in the Act.

Ryan A. Costello, Esq., Appointed Chester County Commissioner

OWM Law is proud to announce the appointment of one of our firm’s Partners, Ryan A. Costello, Esq., as Commissioner of Chester County.  Mr. Costello was officially sworn in by President Judge James P. MacElree II on February 17, 2011, to complete the term the term of Carol Aichele, who resigned as Commissioner to serve as Secretary of the Commonwealth under new Gov. Tom Corbett. Costello was elected to a four-year term as Chester County Recorder of Deeds in 2008, which ends this year. He previously served six years on the East Vincent Board of Supervisors, including four years as chairman. He is a graduate of Owen J. Roberts High School, Ursinus College, and Villanova Law School.  See video here.

OWM Law Welcomes Michael B. Murray, Esq.

OWM Law is pleased to announce that Michael B. Murray, Esq., has joined the firm as an associate.  Mr. Murray’s practice focuses on land use matters.  Check out March’s edition of our newsletter to learn more about Mr. Murray. 

UPCOMING EVENTS

Read Legal Ease every other Sunday in the Pottstown Mercury.

See Legal Talk, brought to you by OWM, on PCTV, Tuesdays at 8:30 on Channel 28, and Thursdays at 9:30 p.m. on Channel 98, and also on our website at  http://www.owmlaw.com/legal_talk/legal_talk.php.

David A. Megay, Esq., and James C. Kovaleski, Esq., speaking at SCORE business planning seminars on 4/25/11, 9/12/11, and 11/7/11 (contact SCORE at 610-327-2673).

O'Donnell,Weiss & Mattei, P.C.

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