HARRISBURG, PA — The Pennsylvania Department of Labor & Industry (L&I) has announced a recent settlement with Romero Remodeling Company, a Pittsburgh-based construction contractor, following the company’s violation of the Pennsylvania Construction Workplace Misclassification Act (Act 72). The settlement includes a fine of $144,000 for misclassifying 192 workers as independent contractors instead of employees.
The investigation, conducted by L&I’s Bureau of Labor Law Compliance (BLLC), stemmed from a labor law complaint that alleged improper employment practices at Romero Remodeling. After a thorough review, the department determined that the company had misclassified its workforce, resulting in the deprivation of critical employee benefits such as unemployment compensation and workers’ compensation coverage. Romero Remodeling has agreed to pay an administrative penalty of $750 per misclassified worker as part of the settlement.
“Misclassification of workers undermines a worker’s access to essential benefits like unemployment and workers’ compensation, while also creating an unfair advantage for businesses that sidestep Pennsylvania labor laws,” stated Nancy A. Walker, Secretary of Labor & Industry. She emphasized the department’s commitment to defending workers’ rights and fostering a competitive, fair marketplace for businesses that comply with the law.
The enforcement of Act 72 reflects L&I’s ongoing dedication to protecting Pennsylvania’s construction workforce. The legislation, which came into effect in 2011, aims to prevent the exploitation of construction workers by ensuring they are properly classified as employees when applicable. Misclassification often denies workers their rightful benefits and workplace protections, while also contributing to lost tax revenue for the state.
Under Act 72, companies found guilty of worker misclassification face penalties of up to $1,000 for a first offense and $2,500 for subsequent violations. The law applies exclusively to the construction industry and has been instrumental in elevating industry standards. To date, more than 1,250 construction contractors have been penalized under Act 72, resulting in over $4 million in cumulative fines.
Romero Remodeling’s settlement comes amid broader enforcement efforts by BLLC. Last year alone, the agency investigated 639 potential Act 72 cases, issuing more than $1 million in fines and protecting nearly 1,900 workers who were improperly classified. These efforts underscore the importance of holding businesses accountable and ensuring compliance with Pennsylvania labor laws.
The Romero case serves as a stark warning to other construction businesses about the risks of sidestepping Act 72. For workers, it reinforces the importance of accurate classification in securing their rights to benefits and protections. For employers, it highlights the significance of understanding and adhering to labor regulations, both to avoid penalties and foster ethical labor practices.
As Pennsylvania continues to enforce worker protection laws like Act 72, the state signals a firm commitment to safeguarding its workforce and ensuring fair competition within industries. Businesses are encouraged to thoroughly review their employment practices to remain compliant and support the well-being of their employees.
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