On February 25, 2025, York Builders Association (YBA) leadership took part in a critical discussion at the Pennsylvania Capitol Complex, ensuring that the voices of our members were heard on the impact of excessive labor regulations. Chairman Seth Grove (R-Dover) led the Labor and Industry Government Efficiency Roundtable (LIGER) discussion alongside House Republican members of the Labor and Industry Committee and business experts, including Laurie Lourie, YBA Executive Vice President and Immediate Past President Joe Miller of J.E. Miller Services.
At the heart of the conversation was the Subcontractor Misclassification Act (Act 72) and its significant burdens on small businesses and sole proprietors in the construction industry. The Act’s complex requirements create confusion, increase financial risks, and impose unnecessary compliance hurdles—leaving many contractors struggling to navigate regulations that seem designed to classify workers as employees rather than independent contractors.
Key Takeaways from the Discussion:
Unintended Consequences of Overregulation
The Act mandates that independent contractors meet eight strict conditions—failure to satisfy just one results in misclassification penalties. Even minor technicalities, such as a subcontractor using a contractor’s tool or working at the same location, can lead to costly violations.
Financial & Administrative Strain on Small Businesses
Business owners are burdened with additional costs, including higher labor expenses, insurance requirements, and legal fees. Many also face increased audits and penalties, which threaten their ability to remain competitive.
Lack of Guidance & Support
The Department of Labor and Industry (L&I) has not provided clear compliance instructions, training, or resources—leaving business owners to navigate these challenges alone.
YBA leadership emphasized that while YBA members want to comply with regulations, they need fair, practical policies that support growth rather than stifle it. The necessity of common-sense reforms was highlighted, including:
- Clarifying Independent Contractor Status by allowing a HICPA-registered contractor to be classified as an independent contractor unless a separate contract states otherwise.
- Providing Practical Compliance Tools, such as online training, subcontractor agreement templates, and a compliance checklist to simplify requirements.
- Encouraging Education Over Penalties, ensuring that L&I prioritizes training and guidance rather than enforcing fines without proper instruction.
This discussion marks a significant step in YBA’s ongoing advocacy efforts. Our leadership remains committed to protecting small businesses, fighting regulatory overreach, and ensuring that lawmakers understand the real-world impact of their policies.
