Pennsylvania’s New Independent Contractor Law
These changes will be effective in 2011.
– The criteria they must meet will go above and beyond what the IRS already enforces.
– Standards set forth by Act 72 will ultimately be applied to other industries.
– An individual hired “to perform services for remuneration in the construction industry will be automatically treated as an employee of the construction business, and not as an independent contractor, for Pennsylvania workers’ compensation and unemployment purposes” unless:
1.) The individual is free from the hiring party’s control or direction over the performance of the services and
2.) All of the following requirements are also satisfied:
– There is a written independent contractor agreement between the hiring party and the individual.
– The individual possesses the essential tools necessary to perform the services
– The arrangement between the hiring party and the individual is structured so that the individual is structured so that the individual may realize a profit or suffer a loss from the engagement.
– The individual has ownership interest in his or her business that is contracted to perform the services for the hiring party.
– The individual must have a physical business location separate from the hiring party’s location.
– The individual must have either previously performed the same types of services for the other parties or must hold himself out to other potential customers as being able and available to perform such services.
– The individual must maintain for the duration of the contract liability insurance of at least $50K.
Source: Eastern Pennsylvania Business Journal,
November 15, 2010
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The Seltzer Group, located in Easter Pennsylvania, specializes in developing safety, workers compensation, human resources, claims, and risk financing programs. They are a proud member of the Keystone Insurers Group and are nationally recognized for their expertise in workers compensation solutions. The Seltzer Group serves businesses and individuals locally, regionally, and on the national level.