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. Now, the heat's been turned up to the point where unethical builders are having to avoid reporters at their own conventions because they don't want to be asked about worker misclassification. Reporter Joe Dana of Arizona's Nightly News tried to confront one builder after another and they certainly didn't want to talk about it. Instead, as you can hear in the following 4-minute video, he was simply told “You're not going to be here.”
Video: Silence from homebuilding association about illegal labor
Now, Dana reports that the Arizona Registrar of Contractors has filed a formal complaint of aiding and abetting unlicensed construction against Fulton Homes. State regulators told Dana they're going “to the top rung of the ladder to address the problem.” That report can be seen in the following 3½-minute video.
Video: ROC: Unlicensed labor on Fulton Homes site
Addressing worker misclassification is a complex undertaking no matter which state we're talking about. But the regulatory environment in Arizona may make it easier than it would be in Texas, for example, because Arizona builders are licensed while builders in the Lone Star State are not. Different states are trying different things, as noted by Bloomberg News.
Texas State Senator John Carona, D-Dallas, told me “there's nothing simple about it” when talking about the legislation he proposed that would have broadly imposed fines for misclassifying employees. At that time, Carona said “certain elements within the business community” would work hard to make sure this kind of legislation doesn’t pass, and he was correct. The bill died after the largest home builders came out against it. Perry Homes, D.R. Horton, and David Weekley Homes argued that home prices would rise if they had to pay workers as employees. They also said the bill would make an already complex area of the law even more complex. Smaller home builders, it should be noted, chose to be neutral on the bill after the proposal was altered to address their concerns.
Government action can be part of the solution. But this fight will also require the aggressive work of ethical contractors like John Jackson and in-depth reporting of journalists like Joe Dana and the team here at Construction Citizen. Your comments are welcome.
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