‘Statutory Employer’ Immunity in Jeopardy in Pennsylvania

Labor
Published
Contact: NAHB Office of Legal Advocacy and Compliance
[email protected]
(800) 368-5242 x8359

Pennsylvania's general contractor classification protections are under scrutiny as a case involving a construction company is working its way through the courts. NAHB and the Pennsylvania Builders Association are engaged in the case.

Under Pennsylvania's Worker's Compensation Act Section 302(b), if subcontractors do not pay an injured worker’s compensation claim, the general contractor must then pay those benefits to the subcontractor-employee, thus creating a tier of secondary liability where the general contractor becomes a surety of worker compensation or “statutory employer” of the injured worker.

Being named a “statutory employer” exempts the general contractor from all actions brought by the subcontractor-employee.

In Yoder v. McCarthy Construction, Inc., a jury ordered McCarthy Construction, a general contractor, to pay $5.6 million to the plaintiff for injuries that occurred from a fall on a job site.

On appeal, the Pennsylvania Superior Court reversed and remanded Yoder's award, finding that McCarthy Construction was not liable for a worker’s compensation payout under the “statutory employer” requirement.

Pennsylvania’s Supreme Court has now taken the Yoder case for review and is expected to hear oral arguments early next year.

NAHB has joined the Pennsylvania Builders Association to file an amicus brief in the case. The brief argues that if “statutory employer” protections are removed, general contractors and subcontractors could face significant cost increases at every construction project in the Commonwealth of Pennsylvania. NAHB will closely monitor the case and similar issues in other jurisdictions.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Material Costs
Oct 16, 2026
U.S. Cuts Duties on Canadian Lumber

Following its annual review, the U.S. Department of Commerce lowered antidumping and countervailing duties on Canadian softwood lumber imports from about 35.16% to 24.75%.

Legal
Oct 15, 2026
Supreme Court Leaves New York City’s SoHo/NoHo Arts Fee in Place

The U.S. Supreme Court declined to hear a challenge to a New York City law that requires certain property owners to pay a substantial fee to convert their properties to unrestricted residential use. NAHB filed a brief urging the Supreme Court to review the case.

View all

Latest Economic News

Economics
Oct 14, 2026
Labor Shortages a Growing Problem

Labor shortages in the home building industry are becoming more widespread, according to recent results from the NAHB/Well Fargo Housing Market Index (HMI) survey.

Economics
Oct 14, 2026
Inflation Accelerated in September

Higher energy prices pushed inflation to a four-month high in September, keeping pressure on the Fed as inflation has remained above its 2% target for more than five years.

Economics
Oct 13, 2026
Existing Home Sales Increased in September

Existing home sales rose after three months of declines as improved inventory gave buyers more negotiating power. As buyers wait for rate relief, homes are sitting on the market longer and for-sale inventory reached the highest level in over a decade.