As the construction industry continues to recover from restrictions placed throughout the past year on businesses, one important new requirement unrelated to COVID-19 took effect on October 7, 2020, the Pennsylvania Construction Industry Employee Verification Act, also known as Act 75. This Act applies to all construction industry employers that conduct business in Pennsylvania and employ at least one person in Pennsylvania.
The Act requires employers in the construction industry in Pennsylvania to use E-Verify, a federal program operated by the U.S. Department of Homeland Security which allows employers to verify electronically the eligibility of their employees to work in the United States.
The Act provides that complaints of violations of the Act may be reported to the Pennsylvania Department of Labor and Industry. The Department, acting on such complaints, may “enter and inspect” the records of employers to ensure such records comply with the requirements. Notably, records for each employee must be kept either for the duration of the employment or three (3) years, whichever is longer. Violations can result in a variety of penalties ranging from a warning to prosecution by the Pennsylvania Attorney General’s office. Such penalties can result in heightened reporting requirements and may result in suspension of any business license(s).
Beyond their own employees, contractors should be aware of the risk of liability from their subcontractors moving forward and take actions to protect themselves. Under the Act’s provisions, a contractor can avoid liability for a subcontractor’s violations if the contractor requires compliance with the Act and provides for termination in the event of a subcontractor’s breach. Additionally, the contractor must receive written verification from the subcontractor providing that the subcontractor is aware of and is responsible for compliance with the provisions of the Act.
Employers in the construction industry should develop policies and procedures to ensure compliance with the Act and be able to demonstrate a good faith effort to comply with the Act’s requirements in the event of a violation. Should you have any questions on how you can develop such policies and procedures or otherwise comply with the Act, please contact any of our Construction Group attorneys or any other Meyer, Unkovic & Scott attorney with whom you have worked.
This material is for informational purposes only. It is not and should not be solely relied on as legal advice in dealing with any specific situation.