Galloway applauds passage of H.B. 413, helping nearly 400K misclassified contractors

Bill would help prevent employee misclassification

Rep. John T. Galloway    May 2, 2023

HARRISBURG, May 2 – A bill introduced by Rep. John Galloway, D-Bucks, to amend independent contractor standards in the construction industry passed with bipartisan support in the House today.

The bill, H.B. 413, now heads to the Senate for further consideration.

House Bill 413 would make changes to the three-pronged system that dictates whether a construction worker can be classified as an independent contractor. Currently, a worker can be classified as such if:

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

The bill would broaden the scope of the first requirement, adding that an individual must not only have a written contract to perform services, but that the written contract is project specific and contains a particular scope of work and definitive time period to perform the services.

Galloway has long sought to tackle employee misclassification, creating a joint task force in 2020 to investigate the issue. Through its investigation, the task force found that, annually, there are over 389,000 Pennsylvania employees who are misclassified as independent contractors.

The issue is especially rampant in the construction industry, where employees who are mistakenly classified as independent contractors lose important benefits like health insurance.

“This is a problem that has plagued Pennsylvania for a long time,” Galloway said. “I’m happy this bill has passed the House and we can finally make steps toward protecting the status of construction workers statewide.”