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.
November 21, 2013
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.
November 13, 2013
To some in construction, avoiding payroll taxes by paying workers as independent subcontractors is just the way to do business. But, as we've repeatedly noted, it is illegal to do that when the person you're paying meets the government's definition of an employee. The intentional misclassification of workers is also one of the largely unseen causes for the degradation of the American middle class because it undermines the employer-employee relationship in a way that leads companies to simply throw people away when they are through with them. This problem didn't reach crisis levels overnight, and it won't be solved quickly, either. But the tide is starting to turn.The federal government has largely been on the sidelines when it comes to enforcement, so what we've seen is more and more states making moves to crack down on the practice. Texas is gearing up to root out worker misclassification on taxpayer subsidized projects, and other states are pursuing bolder policies. A recent report by Bloomberg News declares that “States from New York to California are taking steps to crack down on employers who improperly classify their workers or fail to declare their income.” From the Bloomberg report:
November 05, 2013
One of the guys who originally inspired me to advocate on behalf of the blue collar workforce here in Texas, Mike Rowe, has come under fire lately because he's not afraid to spread the message about closing the skills gap in places that might not seem friendly to one side of the political spectrum or the other. The latest attacks on Rowe came after he appeared on the conservative Glenn Beck program to talk about his recent campaign, Profoundly Disconnected.After he was on Beck's show, a woman named Shannon Walsh wrote to Rowe: “How could you associate with such a horrible and psychotic person that is Glen Beck? I wouldn't accept a dime off that hateful, nasty racist. Very disappointed to see this post.”Rowe's response to her was gracious, as was his response to another person who wrote to him after he was on the air with the liberal Bill Maher:“Truth is, every time I go on Fox, my liberal friends squeal. And every time I show up on MSNBC, my conservative pals whine. Not because they disagree with my position – everyone agrees that closing the skills gap is something that needs to happen.
October 29, 2013
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.
October 25, 2013
Business leaders and educators in Texas are coming together to talk about how they can better cooperate following the passage of sweeping education reforms. Those reforms, known as House Bill 5, are designed to move the state away from the college-for-all policy and toward a more flexible model where the skilled trades are promoted as real options. As Construction Citizen readers know, we're passionate about the idea that there is a path to success for just about everyone even if that path doesn't require a four-year degree.That's why I'm proud to announce Construction Citizen and its publisher are teaming up with the organizers of a summit in Houston on November 5 to spur this important dialogue. Registration is now open for the Building Careers: Construction Workforce Luncheon which will be held at the George R. Brown Convention Center.
October 24, 2013
Efforts to crack down on worker misclassification in Texas took a step forward this year with the passage of a targeted crackdown on the practice that some have gone so far as to call “organized crime”. But, as we've reported, there is much more to do as far as implementation of the law passed by the legislature and signed by Governor Rick Perry. Many players in commercial construction are hopeful that when the legislature convenes again in 2015, a broader misclassification crackdown like the one pushed this year by Senator John Carona, R-Dallas, can become reality.Meantime in Arizona, one man in particular has had enough and he's become an aggressive watchdog on what he and others are now calling “illegal labor”.
October 10, 2013
Worker safety is simply a priority for us at Construction Citizen just like it should be for any company doing construction around the world. Apparent safety violations were a big part of the recent problems that turned into a huge embarrassment for several companies involved in student housing construction at the University of Texas at Austin. The “race to the bottom in construction”, as it's been called, nearly always involves companies that have total disregard for worker safety. It's part of a culture in which it's also routine to deny workers their overtime pay as well as misclassify them specifically to avoid paying taxes. Now comes news that OSHA dropped the hammer on a construction company in Oregon that wasn't protecting its workers from falls. Perhaps more importantly, the government seems to be getting more aggressive about taking preventative steps to ensure worker safety. The Occupational Safety and Health Administration fined the company in this case, Munoz Construction, $70,000.
October 03, 2013
The Construction Citizen team has written many times about the growing controversy over whether college is becoming obsolete and actually a liability for many in America. While pursuing a four-year degree is still a great option for a lot of people, there is growing consensus that it's certainly not the best option for everyone. That's evidenced by the fact that not only is there a college debt crisis, but you can now point to one career option after another that requires a college degree but doesn't pay anything close to what you'd need to make to pay off that debt in a reasonable amount of time while also trying to support a family.In their humorous way, Buzzfeed just published a list of the top 25 low-paying jobs that require college degrees, and some of them might surprise you. Marriage and family therapists, biological technicians, and journalists make less than $50K per year.
September 23, 2013
Following reports on the alleged mistreatment of workers on University of Texas student house projects, some of those workers actually received some good news this past week. They’ve now received checks for the overtime their bosses had previously denied them.After fighting very hard to get it, the Workers Defense Project in Austin let us know that some of the workers recovered $35,000 in overtime payment that they were due for work on the Calloway House project that was featured in the follow-up report from The Daily Texan. Workers Defense held a celebration at their offices for those workers and to offer encouragement to others who are still trying to recover money they are owed.“Without God, none of this would be possible,” said one worker who was elated to finally get his paycheck. It’s not the first time he’s been stiffed by an unscrupulous construction company owner. “This happens way too much, but these people helped me get the money I had already earned so I can feed my family.”
September 17, 2013
