I Work Construction. Am I An Employee or Not?

By Jonathan Young

What once was a simple, almost silly question is now much more complex. The work relationship that once was easily characterized as between an “Employer” and “Employee” is now more nuanced with the usage of Independent Contractors and Subcontractors, Borrowed Employees, and Temporary Employees all entering the workplace picture. This has resulted in a host of new employment law issues about legal agency, workers’ compensation coverage, general liability indemnification, and some recent criminal sanctions for intentional misclassifications. 

It is the nature of the work relationship, not the terminology, that controls the legal status between the Employer and the Employee. Many people who have been told they are “Independent Contractors,” after appropriate legal analysis, are “Employees”. This is not a distinction controlled by whether you receive a 1099 or a W2 tax form at the end of the year but by a significant list of factors used to determine your status.

DISTINCTION BETWEEN EMPLOYEE AND INDEPENDENT CONTRACTOR

Pennsylvania’s legal analysis of this topic still uses antiquated terminology such as “master” and “servant” to explain the Employment relationship. Master means Employer, and Servant means Employee.

Under the Pennsylvania Workers Compensation Act, the term Employee is synonymous with Servant and includes all natural persons who perform services for another for a valuable consideration. Generally, if the manner and means of performing the work reside in a Master, tools and other implements of work are supplied by the Master, and taxes are withheld, the Servant is an Employee of the Master. 

Just calling someone an Independent Contractor does not make that person an Independent Contractor. Neither does not withholding taxes and paying them via a 1099. The IRS sets forth specific criteria which help discern the difference between an Employee and an Independent Contractor. (See: IRS Revenue Ruling 87-41, 1987-1 C.B. 296)

Pennsylvania Courts have weighed in on this definitional difference and set forth the factors to consider in determining whether an individual is an “Employee or an “Independent Contractor.”

The Courts have reviewed the amount of direction and control exercised by a “Master” to determine the existence of an Employee/Employer relationship. Control in an employment relationship exists where the alleged Employer possesses the right to select the Employee, the right and power to discharge the Employee, the power to direct the manner of performance, and the power to control the Employee’s time and compensation. That individual is an “Employee” regardless of whether they are called an “Independent Contractor” or not.

To avoid insurance expenses, particularly in hazardous occupations such as in the construction business, there was often an attempt to misclassify an “Employee” as an “Independent Contractor”.  In such a case where someone suffered a severe injury on the job, this misclassification led to significant financial woes for the worker and often left the state on the hook for medical bills through MEDICAID or the State Workers Compensation Uninsured Employer’s Fund.

To address these issues, the Construction Workplace Misclassification Act was passed in 2011. Effective February 10, 2011, an individual who performs services in the construction industry for remuneration is an independent contractor only if all three of the following criteria are satisfied:

1. The individual has a written contract to perform such services.

2. The individual is free from control or direction over the 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 Employer must be in the construction industry for the Misclassification Act to apply. In the Misclassification Act, the term independently established construction trade, occupation, profession, or business is defined as someone who:

• possesses the essential tools, equipment and other assets necessary to perform the service;

• can realize a profit or loss from the service;

• performs the service through a business in which the individual has a proprietary interest;

• maintains a separate business location;

• has previously engaged in similar services set forth above while free from direction and control;

• maintains liability insurance of at least $50,000.

UNLESS YOU CAN COMPLY WITH THESE DEFINITIONAL REQUIREMENTS, YOU ARE AN EMPLOYEE EVEN DESPITE ANY BOSS’S  INSISTENCE THAT YOU ARE AN INDEPENDENT CONTRACTOR.

Financial Penalties: A violation of the Misclassification Act is considered a summary offense subject to a $1,000 fine for a first violation and $2,500 for each subsequent violation, payable to the Workers’ Compensation Administrative Fund.

If you have an employment law or workers’ compensation matter you need help with, call us at 610.367.2921 or contact us online.

Why you may not need a Revocable Living Trust in Pennsylvania.

By Eric Wert

Many estate planning clients come to their first meeting with the expectation that they need a Revocable Living Trust.  Frequently, they have heard from a national finance personality that a Revocable Living Trust is an essential part of a wise and efficient estate plan. The personality argues that by placing your assets in a Revocable Trust, you avoid the lengthy and expensive probate process while maintaining control over your assets.  While this advice may be true in many parts of the country, a Revocable Trust is usually not the best choice in Pennsylvania.

A Revocable Living Trust is established when a Grantor (the person who creates the document) transfers assets into a Trust during his or her lifetime but reserves the right to revoke or change the Trust at any time.  Compared to an Irrevocable Trust, this type is “revocable” because the Grantor can modify or cancel it whenever they choose.

First, it is important to know that a Revocable Living Trust does not eliminate federal estate taxes or Pennsylvania inheritance taxes. The assets in such a Trust are taxed with the rest of the estate.  Further, this type of Trust does not offer significant asset protection because the owner of the assets – the Grantor - retains power over the Trust assets (that is, the power to modify or revoke the Trust) and is, therefore, usually vulnerable to a judgment.

It is correct to state that a Revocable Trust can eliminate probate if a Grantor successfully transfers all of his or her assets into the Trust prior to death.  In Pennsylvania, however, our probate process can be relatively quick and uncomplicated, unlike in many other states.  In addition, avoiding probate through the use of a Revocable Living Trust does not avoid the largest expense most people associate with probate - the Pennsylvania inheritance tax.  This tax must be paid for assets in a Revocable Living Trust even though they do not go through probate.  The cost of probate itself is very small, relatively speaking.  For this reason, most Pennsylvania estate planning attorneys suggest this type of Trust less frequently because it is usually an unnecessary, expensive step.

This is not to say that there is never a good reason to create a Revocable Living Trust, or any other kind of Trust, in Pennsylvania.  There are many kinds of Trusts, each with unique benefits and purposes.  For example, a Revocable Trust can allow for the Grantor to contribute assets for the benefit of others (or themselves) that will be managed by a trustee as the Grantor ages or if he or she becomes disabled. Understanding these options can empower you to make the best decisions for your estate.

In the end, it is best to come to your first meeting with your estate planning attorney with an open mind, knowing that what you’ve heard from a national personality may not apply in Pennsylvania.  Be prepared to communicate your goals for your estate so that the attorney can recommend the best plan to achieve those goals under Pennsylvania law.

If you have questions about the most efficient way to set up your estate, Dischell Bartle Dooley can help. You can contact us online or call 215.362.2474.

Pool Safety and Liability Protection

By Jonathan Young

As summer approaches, families will flock to pools for relaxation and recreation. However, amidst the splashes and laughter lies a very serious legal challenge for property owners and local public pools alike. According to the Center for Disease Control (CDC), drowning is the leading cause of death for children. More children ages 1-4 die from drowning than any other cause of death and it’s the second leading cause of unintentional injury death for children ages 5-14.

Pool safety isn't just about preventing accidents; it's also about mitigating liability risks and protecting everyone involved. In this article, we'll explore several proactive measures for maintaining pool safety within the confines of the law.

Understand Legal Responsibilities and Local Regulations:

Property owners have a legal obligation to ensure their premises, including pools, are safe for guests. It is a good idea to familiarize yourself with local, state, and federal regulations governing pool safety, such as fencing requirements, lifeguard ratios, and signage mandates. Additionally, you should know the legal implications of accidents on your property, including slip-and-fall incidents, drowning, or injuries caused by faulty equipment.

Implement Comprehensive Safety Measures:

Property owners are responsible for installing physical barriers around the pool area. Installing and maintaining appropriate fencing and gates around the pool prevents unauthorized access, especially for children. In today’s world diving boards are not recommended in residential pools because of potential head and neck injuries.

Keep readily accessible lifesaving equipment near the poolside, like floatation devices, reaching poles, and first aid kits. Be sure to establish clear guidelines for pool guests, designate responsible adults to oversee pool activities, and specify lifeguard duties if a public facility. You can never be too careful, so conduct routine inspections of the pool area, equipment, and safety features to identify and address potential hazards promptly.

Educate Visitors and Staff:

As a homeowner, it is your responsibility to educate pool guests about safe swimming practices, such as no running on the pool deck, no diving in the shallow end, no swimming alone, and the need to supervise children closely. Additionally, public facilities have a duty to provide comprehensive training to staff members on pool safety protocols, emergency response procedures, and CPR certification, etc. Both private and public pools, should display signs outlining pool rules and depth markers.

Seek Legal Counsel:

Homeowners should make sure they have proper liability insurance coverage and public swimming facilities are required to be compliant with the Public Bathing Law. In either case, it is a good idea to seek legal counsel from attorneys specializing in premises liability and personal injury law to assess the proper pool safety measures, compliance with regulations, and liability exposure.

In the realm of pool safety, legal compliance is not just a matter of regulatory adherence—it's a crucial component of risk management and liability protection. By understanding your legal responsibilities, implementing robust safety measures, educating everyone involved, and seeking professional legal guidance, you can navigate the complexities of pool safety with confidence and safeguard both lives and assets.

If you have questions about a legal matter surrounding pool safety, property liability or personal injury, E. Kenneth Nyce can help. Call us at 610.367.2921.

Add Estate Planning to your "To Do" list.

It’s the most helpful thing you can do for your loved ones.

by Jack Dooley

The new year is a fresh start and a time to make resolutions. It's also a perfect opportunity to think about the people, places and causes that matter most to you. While it's natural not to want to think about our mortality, the process does not need to be somber. Estate planning and creating a Will is very altruistic, and it is something that every individual should do for their loved ones.

A common misconception is that "estate" equals mansions, large stock portfolios, and lavish possessions. Estate planning isn't just for the rich and famous or the very old. Regardless of financial status or age, everyone can benefit from having an estate plan.

Your estate is essentially everything you own, including your home, other property, car, bank accounts, investments, insurance policies, furniture, and personal belongings. An estate plan allows you to designate how those things are given to the people or organizations you care about. Simply put, estate planning is the process of organizing your affairs to ensure your surviving family members are taken care of when the time comes. It is a written record of your wishes and intentions. It indicates how you want your financial assets, property, and belongings distributed — and who will care for your children if they are minors.

The process is not complicated, and you can get started as soon as you are ready. Think about what you own, your cherished belongings and seek counsel from an experienced attorney to draft a Will and other necessary legal documents that address end-of-life considerations. For most individuals, there is no need to be overly concerned about death taxes or complicated trusts. Still, an attorney will work with you to create an appropriate estate plan customized to your needs, financial affairs, and family situation.

It's important you make these decisions and designations while you are alive and well. In the absence of a Will or estate plan, state law controls the disposition of your assets.  Generally, if not survived by a spouse, assets will pass to children equally which may seem acceptable, but the law does not take into account special circumstances (e.g. disability, dependency, trust for minors, etc.).  Additionally, if not structured clearly in a Will, complex probate matters can arise resulting in unnecessary costs, delays, and even litigation.

If you have an estate plan, but it's been a while since you've reviewed it, remember that it is only comforting if you keep it current. It is essential to regularly review your plan — especially after significant life changes, like marriage, divorce, birth or adoption of a child, inheriting money, or even moving to another state where estate laws differ from the one where you drew up your current Will. Be sure to keep an eye on changes in tax laws or other financial legislation as well. If your estate plan is out-of-date, your loved ones could encounter some of the problems you worked so hard to avoid.

The Wills, Trusts, and Estates Team at Dischell Bartle Dooley can help you create or update your estate plan today. DBD combines intricate knowledge and experience with thoughtful and adept execution from tax planning and medical directives, to legal documentation, and probate administration. 

You've provided for your loved ones your whole life. Now is the time to ensure your wishes are carried out as you intend.  For more information, contact us online or call 610.367.2921.

Does Child Support end when High School ends?

Wait, what? Your kid’s High School Graduation can affect your child support???

By Liz Billies

Memorial Day is known to be the unofficial start to summer. While it certainly ushers in more BBQs and trips to the shore, it also signals the start of high school graduation season. Graduation is a special time for all graduates and their loved ones alike, but, it can have additional significance for divorced or separated parents.  Why? Because it may signal the end to child support payments! So what does high school graduation and child support have to do with one another? Let me explain.

Under Pennsylvania law, a child is considered emancipated (i.e. no longer a minor) when they turn 18 or graduate from high school, which ever comes last. Therefore, if your child turned 18 during his or her senior year of high school, they are not considered emancipated until their graduation date. Once a child is emancipated, his or her parent’s obligation to pay for child support ends. Pennsylvania does not require either parent to contribute to college costs. In other words, once your child reaches their 18th birthday or graduates from high school your obligation to support them under PA law ends. Anything you (or your co-parent) choose to do after that point is strictly voluntary. 

So what should you do if you have a graduating senior and a child support obligation? Your county’s Domestic Relations Office will send a letter to both parents requesting information about your child’s graduation date in February or March of his/her graduation year.  If this is your last child to graduate high school or your only child, you need only to confirm that they graduate this year and are already 18.  Then, the office will administratively close your case as of the date of their graduation. There is nothing further that you need to do to stop your child support payments. 

However, this is not the case if you have other children under the age of 18 to whom a child support obligation would still be owed. While the Domestic Relations Office will remove your graduating child from your child support order, they will not recalculate your child support obligation based on the number of remaining children. In other words, your monthly child support amount will remain the same unless you do something about it.  

So what should you do? First, before you file a petition to modify the amount based upon this emancipation, it is important to speak to a family law attorney about your situation.  It may be some time since your child support order was calculated. What if your income has changed?  Or your co-parent’s income? Is your custodial arrangement different? Based upon the answers to these questions, it is possible that a modification could actually result in a higher support obligation or one that is substantially similar to what you are paying or receiving currently.  Your family law attorney should be able to calculate what your potential new support obligation could be and will be able to advise you as to whether filing a petition is in your best interests.

So between ordering a cake and gathering celebratory balloons, make sure to schedule a time with an experienced family law attorney to discuss what your child’s graduation means for your child support obligation.  

Do you have a child support question or another family law issue that needs attention? Please contact one of our family law lawyers to see how we can help. 

A custody battle between states.

Liz Billies Published Article From Pennsylvania Bar Association Family Law Section: Superior Court Determines That Trial Court Misapplied UCCJEA • W. & N.L. vs. L.S. vs. B.L., 1423 MDA 2020 — Non-Precedential Superior Court Opinion.

By Liz Billies

It is no secret that we live in an increasingly transient society. In addition to moving couches and TVs, some parties also bring along their foreign custody orders. What should a party do if they want to modify that order? The Superior Court provided a great reminder as to the rules regarding subject matter jurisdiction in custody actions in W. & N.L v. L.S. v. B.L. Here, the court overturned the trial court’s finding that Pennsylvania was the appropriate jurisdiction to adjudicate the grandparents’ custody action because: (1) the original state (South Carolina) had never ceded jurisdiction to the commonwealth; and (2) father still resided in the original state.

The facts of the case are as follows: L.S. (“mother”) and B.L. (“father”) were married in South Carolina and resided there with their two children until 2018, when the parties separated. On or about January 23, 2020, the parties entered into a custody agreement. As part of that agreement, mother and father agreed that mother could move to Stewartstown, Pennsylvania, and reside there with the children. The agreement also afforded father specific rights regarding visitation and communication. At the time of the agreement, father was (and still is) in the military. While the parties did sell the marital residence located in South Carolina, father continued to reside in the state both after the agreement was entered and during the pendency of this case. However, father is technically a legal resident of Texas. He files taxes in Texas and his driver’s license is registered in that state. Mother continues to live in Pennsylvania.

On or about June 29, 2020, W. & N.L. (“paternal grandparents”) filed a complaint for custody against the parties in York County, Pennsylvania, where mother resides. The decision does not explain why the grandparents chose to file in York County, instead of South Carolina. In response, mother filed objections, arguing both that the trial court had no subject matter jurisdiction in this case and that the grandparents had no standing to file such a custody complaint. In support of her position, mother stated that South Carolina was still the appropri- ate jurisdiction for this matter, as the children still had contacts in that state because father continued to reside there. After hearing, the trial court entered an order stating that the grandparents did have standing to file such a custody action in York County, that York County had subject matter jurisdiction over these parties, and that Pennsylvania was “the more convenient forum.” Mother filed for reconsideration of this decision and a second hearing was held. However, mother’s objections were again overruled on Nov. 2, 2020. In addition to finding that Pennsylvania had subject matter jurisdiction and that the grandparents had standing to pursue this action, the court, sua sponte, temporarily transferred father’s custodial rights to the grandparents pursuant to 51 Pa.C.S.A. §4109, the statute which governs custody proceedings during military deployment. The court said that transfer would be for “as long as father wishes.” Mother appealed this decision.

Mother’s appeal centered on two issues. First, mother asserted that the trial court erred in transferring juris- diction from South Carolina to Pennsylvania, given that, inter alia, father still lived there and South Carolina had never ceded jurisdiction to the commonwealth. Second, mother appealed the trial court’s sua sponte transfer of father’s custodial rights to the grandparents, as such a transfer was done without agreement and without consideration of the custody factors. Mother explained that this transfer was, in essence, a modification of the January 23, 2020, custody agreement and thus a full analysis of the custodial factors was required.

The Superior Court’s decision primarily focused on mother’s first issue for appeal. In support of her position, mother explained that South Carolina still had exclusive and continuing jurisdiction over the case. No party had gone to South Carolina asking for the court to transfer jurisdiction to Pennsylvania. As South Carolina had never said that they no longer had jurisdiction, jurisdiction cannot simply be taken away without their input. Further- more, father still lives in South Carolina. In short, mother argued that South Carolina should get to determine if Pennsylvania is the more convenient forum for the parties, not a Pennsylvania court.

The Superior Court agreed with mother that Pennsyl- vania did not have jurisdiction to modify custodial rights with regards to the grandparents’ custody claim. In order to make their determination, the court painstakingly re- viewed and applied the UCCJEA (the Uniform Child Custody Jurisdiction and Enforcement Act). The court explained that a trial court can only modify another state’s custody order if they have jurisdiction to make an “initial custody determination” and that no parents or people acting as parents reside in the other state. See 23 Pa.C.S.A. §5423. The court explained that the purpose of the UCCJEA was to clarify that the court that entered the initial child custody decree had exclusive and continuing jurisdiction unless anyone with custodial rights to the children no longer resided in that state. There was no question that father still resided in South Carolina. However, to get around this fact, the trial court had analogized father’s situation in South Carolina as akin to an out-of-state college student away at school. The trial court reasoned that South Carolina was not his permanent home and thus, they had jurisdiction to adjudicate the grandparent’s custody claim.

The Superior Court disagreed with the trial court’s analogy. Although father does have a Texas driver’s license and pays taxes in Texas, he has lived in South Carolina consistently since the parties’ separation and, at this time, had no plans to move back to Texas or to move to another state. Also, and perhaps even more impor- tantly, South Carolina never ceded jurisdiction to Pennsylvania. Instead of asking for South Carolina to relinquish jurisdiction, the grandparents filed in Pennsylvania first.

The Superior Court stated that only South Carolina can decide that they no longer have jurisdiction. Pennsylvania cannot make that decision, nor can a party, in this case father, give consent to the appropriateness of another jurisdiction. Based on the above, the court found that Pennsylvania had no subject matter jurisdiction in this case and thus, they vacated all of the orders and remanded the case back to the trial court with these instructions. Because they vacated all of the orders in the matter, the Superior Court did not reach a decision on the second point as to whether the court inappropriately transferred father’s custodial rights to the grandparents without a full analysis of the custody factors. However, in a final footnote, the Superior Court did state that it did appear that mother was correct in her appeal of this, as well. While father is on active duty, he is not deployed. Thus, 51 Pa.C.S.A. §4109 is not applicable here.

This case is a great reminder that, before filing anything, we as practitioners must make sure that we are filing in the appropriate jurisdiction. If a client comes to you with a foreign decree, we must ascertain whether jurisdiction in Pennsylvania or the other state is appropriate before anything is filed. If we do not do so, we are in danger of wasting our client’s time and money. While there certainly are strategic reasons for filing in one jurisdiction versus another, this case makes it clear that a party in a custody case cannot consent to a new juris- diction without the original jurisdiction first relinquishing its right to decide the matter. Also, what remains to be explained in this decision is why the grandparents did not just file in South Carolina themselves. Were they told that they were not able to do so? Was there a strategic reason why Pennsylvania would have been a better forum for their claims? While strategy and motives play into many decisions that we make as family law practitioners, the Superior Court makes it clear that such maneuvers will not be allowed when they are in violation of the UCCJEA and our jurisdictional rules.

Elizabeth Billies is a partner at the Lansdale, Pennsylvania based law firm of Dischell Bartle & Dooley PC, where she exclusively practices family law, specializing in complex financial matters. She is the past president of the Doris Jonas Freed Matrimonial Inn of Court and is an active member of the Pennsylvania Bar Association and Montgomery Bar Association Family Law Sections. Ms. Billies is a graduate of the University of Wisconsin-Madison and Villanova University School of Law. In her spare time, she writes about all things family law on her blog, The Divorce Lawyer Life, https://thedivorcelawyerlife.com. She can also be reached at ebillies@dbdlaw.com or at 215-362-2474.

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