Frequently Asked Questions - HICPA and CWMA


HICPA

How do I know if I need to register with the state as a home improvement contractor?

According to HICPA, a home improvement contractor includes anyone who works on existing residential properties
(land or buildings) and does "repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation or sandblasting" or work on driveways, swimming pools, pool houses, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, fences, gazebos, sheds, cabanas, landscaping, placement of retaining walls, fountains, drainage systems, painting, doors, windows, waterproofing, HVAC or awnings. If you’re not registered yet, we can help with that, too.

How do I register as a home improvement contractor?

You can register on your own at www.attorneygeneral.gov or we can help with that process.
If you are in need of assistance, please call 1-800-345-3033.

Do I need a HIC registration number to purchase or produce a HICPA compliant contract?

Yes. Whether you create your own contract or choose to license use of the HICPA Compliance LLC contract,
you will need to have your HIC registration number.

If I have a registration number do I still need a contract?

Yes. Registering alone is not enough to comply with PA laws and to protect you against unjustified complaints. You must have both a registration number and a HICPA compliant contract for each job over $500.

Do I need a HICPA compliant contract for all jobs?

Beginning on July 1, 2009, HICPA has required that you have this contract in place for use on all projects beginning
July 1 or later that are valued at $500 or more. This contract must be completed and signed before the job is started.

What happens if I do not have a contract or if my existing contract is not HICPA compliant?

The law says that (1) a disgruntled customer can report a violation to the Attorney General's Office for prosecution as a crime involving "home improvement fraud," (2) the entire contract is unenforceable by you if certain clauses appear in the document, AND (3) use of a noncompliant contract is an "unfair or deceptive act or practice" under Pennsylvania's Unfair Trade Practices and Consumer Protection Law, entitling the customer to seek triple damages plus costs and legal fees.

How can I be sure that my contract is HICPA compliant?

Here are your options for ensuring a HICPA compliant contract:
  • Spend hours reviewing the law and attempt to create your own HICPA compliant contract
  • Hire an attorney and pay him or her thousands of dollars to write the contract for you
  • Find a sample online of an unwieldy, uncustomizable, 20-page (or more) document which
    will cost you hundreds of dollars
    • - OR -
  • You can purchase the right to use the HICPA Compliant Home Improvement Contract
    right here, right now

What is the contract offered by HICPA Compliance LLC?

This form contract (6 pages on 4 pieces of paper) was developed by the late Charles E. Shoemaker, Jr., Esquire, Yale Law School graduate and Pennsylvania lawyer for over thirty years, and Frank A. Alexander, builder, home improvement contractor and five-time Past President of the Lehigh Valley Builders Association. HICPA Compliance LLC's HICPA Compliant Home Improvement Contract contains all of the required contract provisions and notices in an easy-to-use, contractor-friendly format.

How do I order this contract through HICPA Compliance LLC?

HICPA Compliance LLC offers two options: a customized contract with your logo and letterhead, or a standard blank form. To order this easy to use contract, click here.

Why is my license for the HICPA Compliance contract good for only 2 years?

Because the law is going to change (we have spoken with the Attorney General's office and the legislature is already considering amendments and who knows what court decisions will come down on issues like the conflicts between HICPA and UTPCPL) during the license period, we will update our licensees and provide an updated contract as needed. In the first year following July of 2009, we have already provided three (3) updates to our customers - all free of charge.

What will it cost to renew my license to use the HICPA Compliance contract for year 3 and thereafter?

You will pay $150. Your price will never change. Need to renew your license? Call 888-641-1215 x101, Monday through Friday, 8am - 5pm.

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CWMA

How do I know if I must comply with PA’s Construction Worker Misclassification Act (CWMA)?

Effective February 10, 2011, ALL construction companies (residential, commercial, industrial - new construction and renovations) using independent contractors (subs) are required to comply with Pennsylvania’s Construction Workplace Misclassification Act (CWMA).

Is my company included in the list of businesses engaged in “construction”?

Yes if you are included in the CWMA definition of “construction” - erection, reconstruction, demolition, alteration, modification, custom fabrication, building, assembly, site preparation and repair work on any real property. You can’t get much broader than that.

What happens if I don’t comply with CWMA?

If you don’t comply with CWMA, your subs become your employees and you are responsible for withholding federal, state and local income taxes, withholding one-half and paying the other one-half of Social Security and Medicare taxes, paying unemployment compensation and workman’s compensation insurance premiums - not to mention fines and penalties under CWMA. The fines and penalties for non-compliance? First offenses may be prosecuted as third degree misdemeanors with penalties up to $1,000 for the first violation. Subsequent offenses may be prosecuted as second degree misdemeanors with penalties up to $2,500 - and each misclassified worker is considered a separate offense.

What do I have to do to comply with CWMA?

To keep your sub an independent subcontractor (and not an employee) you must: Requirement #1: Have a written independent contractor agreement with the sub; AND, Requirement #2: The sub must be free from your control or direction over the performance of his services, both under the contract and in fact; AND, Requirement #3: Your sub must maintain at least $50,000 in liability insurance; AND, Requirement #4: Your sub must be “customarily engaged in an independently established trade, occupation, profession or business” – in other words, possess his own tools; realize a profit or suffer a loss as a result of his performance of services through a business in which he has a proprietary interest; maintain a separate business location; AND, have previously worked as or hold himself out to the public as a “bona fide independent contractor”.

What is the written contract offered by HICPA Compliance LLC?

It is a 2 page comprehensive and CWMA compliant agreement for you and your subs. Because contractors often use the same subs repeatedly, it is easier to have one basic Agreement for Independent Contractor Services and to deal with each job on a project by project basis. The first page (front and reverse) is the pre-approval of the sub as an independent contractor qualified under CWMA. Signing this doesn’t obligate you to offer any project to the sub in the future (or require the sub to accept any project if and when offered later). After the Agreement for Independent Contractor Services is signed you will use a copy of the one page Project Form, for every project thereafter. Simultaneously fill out the Project Form, if you need the subs’ services to complete a project immediately. If not, use the Project Form when the first need for the sub’s services comes along and every time thereafter when you have a new project for that sub. You and the sub sign the Agreement for Independent Contractor Services only once. You and the sub sign a new Project Form each time you use the sub’s services!

Who developed this simple to use contract?

The Agreement for Independent Contractor Services and Project Form concept and content were developed by the late Charles E. Shoemaker, Jr., Esq., Yale Law School graduate and Pennsylvania lawyer for over thirty years, and Frank A. Alexander, builder, home improvement contractor and five-time Past President of the Lehigh Valley Builders Association.

How do I order this contract through HICPA Compliance LLC?

To order this easy to use contract, click here.

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