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Is this legal?

PennsylvaniaConstruction ContractMechanics LienPrompt Payment

This is a part of a contract that I, after 17 years in the business have run across, and would like to get an opinion on the legalities. I live in the Pittsburgh area. C. The Company will deduct $100 from each paycheck until a retainer is met in the amount of $1500.00 to be held by the company. The retainer will be returned in full to the Independent Contractor after one full year following the last installation performed by the Independent contractor unless any chargebacks are incurred within this time period, of which the amount owed will be deducted from the full retainer amount.

1 reply

Feb 24, 2022
You question leads to a lot of follow-up questions, which prevent me from providing a definitive answer. However, it is possible that the contract/clause violates Pennsylvania and Federal Wage Payment laws. That question will hinge upon whether the independent contractor is considered an employee for purposes of the statutes (NOTE - the title used by the employer does not control), which is a very fact sensitive determination. The clauses may also violate the payment and retention provisions in Pennsylvania's Contractor and Subcontractor Payment Act if the Contract is for work on a private commercial project, it likely . If it is on public project, the clauses may violate the payment/retention provisions in Pennsylvania's Procurement Code. If you want to discuss the issue further, please give me a call at (412-242-4400)
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