House Labor & Industry Committee advances amended bill to tighten rules on construction-worker misclassification

The House Labor & Industry Committee voted to report House Bill 721, as amended, advancing legislation that updates the Construction Workplace Misclassification Act (Act 72 of 2010) to add new definitions, sharpen enforcement procedures and penalties, authorize the attorney general to investigate and prosecute repeat misclassification, and provide misclassified workers a private right of action.

Sponsor Representative Matthew Donahue, the bill’s prime sponsor, told the committee the measure implements unanimous recommendations from the joint task force on misclassification created by Act 85 of 2020 and cited task-force findings that “in 2021, nearly 11,000 misclassified employees suffered injury or illness at work but were denied workers’ compensation” and that “$91,000,000 in revenue was lost to the unemployment compensation trust fund due to worker misclassification.”

The committee considered two floor amendments. Amendment A00298, a repeal of Act 72 offered by Committee Chair Grove and moved for adoption by Representative Gleim (seconded by Representative Barker), failed on a roll call. Representative Grove argued repeal was needed to avoid criminalizing small businesses and to avoid what he described as “weaponizing the Attorney General’s office to go after private business.” Opponents of repeal — including Representative Haddock, Representative Miller and Representative Gleim during separate remarks — said the underlying law and the bill target wage theft and protect workers.

A clarifying amendment, A00318, described as refining enforcement and penalty provisions, was offered, moved and adopted (mover: Representative Haddock; second: Representative Young). After adopting A00318, the committee approved a motion to report the bill to the full House (motion to report moved by Representative Murzke; seconded by Representative Siegel); the bill passed the committee as amended.

Debate on the bill focused on two competing concerns: proponents and some labor representatives described persistent misclassification as a form of wage theft that leaves injured workers without workers’ compensation or unemployment protections, while critics warned that broader enforcement standards could impose new criminal or administrative exposure on small employers and chill hiring.

Representative Donahue said the bill “strengthens and improves Pennsylvania's Construction Workplace Misclassification Act to combat worker misclassification,” adding the measure “will prevent the continued exploitation of our workers through misclassification and strengthen our state law to protect workers in Pennsylvania's construction industry.” Representative Miller, who identified himself as having worked as an independent contractor, warned against adopting a standard that would penalize employers for ordinary direction on worksites, saying, “I have never been in a worksite as an independent contractor where I was 100% free from control or direction over the performance of my work.” Representative Gleim raised questions about the bill’s use of the term “successor entity,” saying it appears inconsistent with Title 15 corporate and unincorporated association law and recommending further drafting if the language remains.

The committee record shows the measure was reported as amended; the transcript records the committee chair announcing, “The bill passes as amended. Thank you. House Bill 721 is reported and as amended from the House and Labor Industry Committee.”

Next steps: the bill will be placed on the House calendar for consideration by the full chamber. Committee members who urged changes said they are willing to work on additional drafting; supporters urged timely floor consideration to address worker protections highlighted in the task-force report.