This post was written by Timothy Berkebile.
Pittsburgh Mayor Bill Peduto recently signed an executive order addressing construction-related employee benefits, insurance, and tax fraud. Under this order, employment of unauthorized workers, paying workers off the books, and misclassification of independent contractors will likely result in restrictions on the ability to obtain licenses and permits necessary to engage in construction in the City of Pittsburgh. Pennsylvania Attorney General Josh Shapiro has also publicly prioritized reducing these types of fraud and “wage theft” in the construction industry.
Taxing authorities and labor unions have increased calls for heightened enforcement against contractors improperly avoiding labor burden costs. Such practices result in decreased tax revenue, negative impacts on workers, and an unfair competitive advantage to those avoiding these costs.
Compliance with Pennsylvania’s Construction Workplace Misclassification Act and Construction Industry Employee Verification Act is often not black and white and depends heavily on factual circumstances. Contractors should prepare for increased scrutiny from public agencies by reviewing current practices involving employees and subcontractors and carefully documenting compliance.
Mayor Peduto’s April 15, 2021 Executive Order can be found at https://apps.pittsburghpa.gov/redtail/images/13953_Construction_Fraud_EO.pdf