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Austin Business Leader: Misclassification Leads to Delay of Projects and Lack of Quality Control

As I continue to travel around Texas to visit with construction company owners who are disgusted with some of the bad actors in their industry, I’m struck by just how candid many are willing to be.  Their conviction comes through in testimony before the Texas Legislature and in interviews.

My latest conversation was with the President of Texas Fifth Wall Roofing Systems Inc., Todd Hewitt, who also chairs the Texas Construction Association’s board.  Hewitt speaks modestly about his company, which does business all over Central Texas.  “Work has come back.  We had a little slow spot last year, and we're peddling as fast as we can to keep up now,” he said.

He said the actions taken by the legislature this year to crack down on worker misclassification are a good start but much more needs to be done.  “There's been a lack of consequences, and that's what's led us to this situation we're in right now,” Hewitt said.  “There are a few contractors who are really prepared to speak on the issues.  Given my involvement with TCA and my familiarity with the issues, I can be one of those who’s able to speak,” he said.  Hewitt was among those who testified in favor of a much broader proposed law that died in the Texas House after the largest home builders came out against it.

“This is an issue that undermines our ability to find and hire workers in a traditional employer-employee fashion,” Hewitt said, noting that many projects are already being delayed because of a shortage of skilled labor. “Schedules get delayed.  We even see it in the work that precedes our work.  We often have to delay our forecast start date because the projects aren't progressing as quickly as people planned for them to.”

He said that the problem isn't confined to timetables for completing projects.  There is also a huge problem with quality control.  “One of the main criteria that distinguishes independent subcontractors from employees is the direction they receive from employers.  For those that work with independent contractors and are not providing explicit direction… those are the kinds of things that will lead to that lack of quality,” Hewitt said.  “We're much better prepared with our own employees to give them complete direction, guidance and enforce the quality standards that we expect.”

Hewitt also said that the mistreatment of workers we hear about all too often is, in large part, attributable to the fact that those men and women aren't considered employees.  “The breakdown of the employer-employee relationship is a very real thing,” he said.  “It’s like a loose thread on a sweater.  You start pulling at it and everything unravels.”

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