If a person works or performs services in the construction industry, Pennsylvania Law, specifically, the Construction Workplace Misclassification Act (Act 72), mandates that certain additional requirements must be met for a construction worker to be considered an independent contractor for legal and workers’ compensation purposes. Under Act 72, a business owner or operator must meet all of the following requirements to prove that an engaged worker is an independent contractor:

  • The individual has a written contract to perform services,
  • The individual is free from control or direction over the performance of the services involved both under the contract of service and in fact, and
  • As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.

The contract in writing must be specific to the project for which the worker will be performing services. As to the last requirement, Act 72 requires proof of certain facts to show that an individual in the construction industry is customarily engaged in an independently established trade, occupation, profession or business. They are:

  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 relates to the realization of a profit or 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 either previously performed the same or similar services for another person in accordance with the above while free from direction or control over performance of the services, both under his contract and in fact; or 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 the above four paragraphs while free from direction or control over performance of the services; and
  6. Maintains liability insurance during the term of the contract of at least $50,000.