When the private sector does not address a major issue, the public sector will often step into the vacuum and do it. The construction industry has been slow to embrace the principles of social responsibility and sustainable value, focusing instead on whatever it takes to be lowest bidder. As a consequence of this, government is adopting policies that reshape the rules for the industry.

The Florida Department of Financial Services Divisions of Workers’ Compensation and Insurance Fraud have released a joint report summarizing their efforts and activities in combating workers’ compensation fraud for the period of July 1, 2012 through June 30, 2013.

Highlights of the report include:

  • Workers’ compensation premium fraud continues to be a high priority.  Cases involve construction industry contractors using shell companies and check cashing stores to launder money for cash pay to workers in order to avoid paying proper premiums.
     
  • The report’s authors write: “This scheme allows these uninsured contractors an unfair advantage when competing with legitimate companies who abide by state statute and obtain and maintain workers’ compensation coverage on all their employees.”

  Read more » about Florida Report on Workers' Compensation Enforcement

Construction companies across Texas that work on public projects are on notice now that the targeted worker misclassification crackdown passed by the legislature in 2013 has taken effect.

HB 2015 “Worker Classification” was signed into law on June 14, 2013, and became effective on January 1, 2014.  This law is considered by many to be a good first step in the fight against the problem that is especially rampant in residential and commercial construction.  But, advocates for workers and for a fair marketplace understand that much more needs to be done in the years to come if the playing field is going to be leveled so that ethical companies will be able to compete.  While putting these penalties in place on public projects will help in the commercial sector, nothing at all will change in residential construction.   Read more » about Targeted Worker Misclassification Law Takes Effect in Texas

Now that the City of Houston is moving forward with a policy to crack down on employers that steal the wages of workers, the pressure will be on to make it work.  It'll be no small task because, as you well know, those that engage in these crimes against hard-working Texans are pretty slippery characters.  And that's probably being kind about it.  Laura Perez-Boston at the Fe y Justicia Worker Center tells us exactly what the law is designed to do:

“The ordinance establishes a process housed in the Office of the Inspector General through which employees can bring wage claims forward.  Companies with a documented record of wage theft – either final adjudication from a court of competent jurisdiction or a criminal conviction – will be included in a publicly listed database on the City’s website and will be ineligible for city contracts or sub-contracts.  Additionally, any company with a criminal conviction of wage theft will be ineligible to receive occupational permits and licenses.”   Read more » about Houston Must Aggressively Enforce Its Wage Theft Ordinance

Our readers know all too well that the problem of payroll fraud, or worker misclassification, has become a cancer for the construction industry and that quite a few states have made moves to try to deal with the problem.  Now, it appears there may be a legitimate effort in Washington to try to deal with it at a federal level.

From McClatchy News:

“Senator Bob Casey, D-PA, estimates the payroll theft has cost taxpayers tens of billions of dollars.  He introduced legislation November 12 that would make misclassification a violation of the Fair Labor Standards Act, would assign penalties for each case of payroll fraud and would create rights for employees to know what their status is and require employers tell workers their status.  ‘I think a lot of people would be stunned to learn that under current federal law it is not a violation of the Fair Labor Standards Act to engage in this kind of misclassification, this kind of fraud,’ Casey said in an interview after the hearing.  ‘It should be illegal and it’s unfortunately not unless you violate some other law.’”

Casey and other lawmakers last week heard from business owners and workers who have been harmed by the practice during a Senate hearing.   Read more » about Some in Congress Push for Misclassification Crackdown

Today, Wednesday, November 20th, 2013, Houston City Council made history passing the first municipal ordinance cracking down on wage theft in Texas and only the second in a major metropolis in the U.S. South. The measure passed unanimously.

In passing the Wage Theft Ordinance, Council sends a clear message that intentionally cheating workers of their pay - especially under city contracts - will not be tolerated in Houston.

The ordinance establishes a process housed in the Office of the Inspector General through which employees can bring wage claims forward. Companies with a documented record of wage theft - either final adjudication from a court of competent jurisdiction or a criminal conviction - will be included in a publicly listed database on the City’s website and will be ineligible for city contracts or sub-contracts. Additionally, any company with a criminal conviction of wage theft will be ineligible to receive occupational permits and licenses.   Read more » about Houston City Council Passes Historic Wage Theft Ordinance

When people think about sexual harassment, they usually envision a male co-worker or supervisor targeting a female employee. Most people know that this scenario can be reversed, with a female harasser and a male victim.

But what about same-sex harassment?

Same-sex harassment is equally unlawful, and this may come as a surprise to unwary employers. A recent example is the case of Boh Brothers Construction, LLC v. Equal Employment Opportunity Commission (EEOC), which was decided by the Fifth Circuit Court of Appeals on September 27, 2013.

This case involved a five-man work crew. The crew superintendent, Wolfe, apparently thought that one of the crew members, Woods, didn't fit in and wasn't manly enough.

According to testimony in the case, Wolfe routinely called Woods names like “princess” and “pussy”, pretended to hump him, and engaged in other abuse. Wolfe testified that he did not think Woods was homosexual (he was not), and was just joking and giving him a hard time.   Read more » about Boh Brothers Construction: the Latest on Same-Sex Harassment

One contractor in Arizona has had enough of what he and others say is “stealing middle class jobs” in his state.  John Jackson has become one of the most aggressive worker misclassification watchdogs we've seen so far – actually walking right onto jobsites and asking people how they get paid.  Jackson told me he's been doing this for about two years and he's now really starting to get attention and results.  The home builders are “on the run”, as he put it.  When confronted, they refuse to answer questions about the practice of misclassifying their workers to avoid payroll taxes and to underbid Jackson and other ethical contractors.

Jackson and his aggressive tactics were first featured on the NBC television affiliate in Phoenix earlier this year, which we highlighted here on Construction Citizen.   Read more » about Misclassification Watchdog Emerges in Arizona [VIDEOS]

After years of pressing Austin leaders to approve a “living wage” law, workers' rights advocates celebrated the passage of a new set of requirements on companies that get tax breaks for relocating and building in the Texas capital.  The city council late Thursday night voted 6-1 to demand that if a company gets a tax break for its project, it must pay the construction workers who build it at least $11 an hour or a “prevailing wage” if that's higher at the time of the construction.  Of the more than 200 people who signed up to testify on the proposal, only 3 were against it.

“What we’ve done over time is make economic incentives a right, not a privilege,” said Councilman Mike Martinez.  “We need to make it a privilege, not a right,” he said, noting that Texas City already does something similar to what Austin will now do.  He and others pointed out that it would be very difficult to argue that Texas City is somehow hostile to business.   Read more » about Austin Demands Higher Wages on Projects That Get Incentives

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