By John A. Greenhall and Lisa M. Wampler of Cohen Seglias Pallas Greenhall & Furman PC
Published August 20, 2020
Last summer, we advised that the Pennsylvania legislature was considering a bill that would require all construction industry employers, on both public and private projects, to use the E-Verify program operated by the Department of Homeland Security to determine the eligibility of their employees to work in the United States. Pennsylvania House Bill 1170, known as the Construction Industry Employee Verification Act (Act 75), goes into effect on October 7, 2020. If you are an individual, entity, or organization in the construction industry that conducts business in Pennsylvania and employs at least one person in the Commonwealth, you will be required to utilize E-Verify to verify the work eligibility of new employees. Employers must also keep verification records for the duration of an employee’s employment or three years, whichever is longer. It is important to note that Act 75 does not replace any I-9 verification requirements or the E-Verify requirements set forth in Pennsylvania’s Public Works Employment Verification Act, which still apply for public works projects in Pennsylvania.
A violation of Act 75 brings a number of penalties should the attorney general bring action against the employer, including a three-year probationary period for each business location where the unauthorized employee performed work and a suspension of the employer’s business license. Contractors and subcontractors may avoid these penalties if they establish that they used the E-Verify system in good faith.
In addition, under Act 75’s “safe harbor” provision, a contractor can avoid secondary liability for its subcontractors’ violations if the contractor requires compliance with Act 75 in its subcontracts, including a clause that terminates the subcontract if a court orders sanctions against the subcontractor for an Act 75 violation and has obtained written verification from the subcontractor that the subcontractor is aware of the provisions of Act 75 and is responsible for compliance.
All contractors and subcontractors are highly encouraged to revisit the language in their subcontract forms to ensure that they include this protective language to safeguard against liability for an Act 75 violation by their subcontractors.
John A. Greenhall s Chair of the Construction Contracts & Risk Management Group at Cohen Seglias. He works with construction clients from project conception to completion to simplify the construction process, protect their rights, and minimize risk. John can be reached at jgreenhall@cohenseglias.com or 267.238.4704.
Lisa M. Wampler is a Partner in the Construction Contracts & Risk Management Group at Cohen Seglias and is the Managing Partner of the firm’s Pittsburgh office. With an active and diverse construction litigation practice, she represents owners, general contractors, construction managers, and the different trades in complex matters involving all phases of the construction process. Lisa can be reached at lwampler@cohenseglias.com or 412.227.5948.