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Pennsylvania Supreme Court holds that the Construction Workplace Misclassification Act only applies to individuals who work for a business entity that performs construction services, not to an employer that is not in the business of construction.

October 1, 2018
Department of Labor and Industry, Uninsured Employer’s Guaranty Fund v. WCAB (Lin and Eastern Taste); 27 E.A.P 2017; decided Jun. 26, 2018; by Justice Wecht

The Supreme Court of Pennsylvania affirmed the decision of the Commonwealth Court and agreed with its interpretation of the Construction Workplace Misclassification Act. The Commonwealth Court noted that the dispositive issue was whether the claimant was an employee or an independent contractor. The employer was a restaurant, not a construction business, and the claimant was hired to perform remodeling work, not to work in the restaurant. In the court’s view, these factors demonstrated that the claimant was an independent contractor. The claimant argued to the Supreme Court that the applicability of the CWMA turned upon the nature of the work performed, not the employer’s business purpose. He argued he was performing services in the construction industry for remuneration and, therefore, could not be classified as an independent contractor for purposes of workers’ compensation. The Supreme Court rejected these arguments, finding that the claimant’s interpretation of the CWMA would lead to absurd results, such as classifying a homeowner as an “employer” simply by hiring a kitchen remodeler and possibly subjecting the homeowner to administrative and criminal penalties. According to the court, the CWMA refers only to those individuals who work for a business entity that performs construction services and is inapplicable where the putative employer is not in the business of construction.



Case Law Alerts, 4th Quarter, October 2018

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