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North Carolina Business Owner Speaks Out Against Worker Misclassification / Payroll Fraud

Last week, the News & Observer, a regional newspaper serving the Triangle region of North Carolina, published an op-ed by Doug Burton, owner of Whitman Masonry in Raleigh.

Burton has over 35 years’ experience in the construction business – 25 of which have been in an ownership position.  Whitman Masonry has completed projects for businesses, churches, and universities, and is well-respected in the region.  Like many other conscientious contractors who play by the rules, Whitman is frustrated by the unscrupulous contractors who get away with cheating the system by claiming that their employees are independent contractors – that they work for themselves.  In his article, Burton calls worker misclassification an epidemic:

“Treating employees as independent contractors when in fact they are regular employees is a fraudulent business practice that has become an epidemic.  Some call this ‘misclassification,’ but it is in fact fraud that lets these cheating businesses –  many from out of state – off the hook for basic protections, including minimum wage, overtime pay, workers’ compensation, health and safety protections, unemployment insurance, federal and state tax withholding, social security withholdings and matching and more.

“This fraud is a growing problem that harms workers, puts a strain on government resources and provides an unfair advantage when these unscrupulous employers compete with law-abiding businesses.  I see it every day.  Other legitimate business owners see it, too, when they are regularly underpriced for jobs and there is no other explanation for such bids other than cheating.  When cheating businesses classify employees as independent contractors to reduce labor costs, legitimate business and workers alike lose out.”

In his article, Burton chides the State General Assembly for not passing legislation that is strong enough to convince would-be cheaters that the punishment is not worth the risk.  He points out that SB 694, introduced by Senator Newton, and HB 482, introduced by Representative Pendleton each contain loopholes that would allow the cheaters to continue to beat the system.  Burton writes:

“Business friendly’ [government] does not mean allowing businesses to cheat their competitors, hurt their employees and shift millions of dollars in costs to North Carolina’s taxpayers.  It is not the time to pass a misclassification bill just to allow the government to check it off a list of accomplishments.  There needs to be a concerted effort in both the House and Senate to make sure this bill will be enforced and will eliminate this growing fraud.”

Doug Burton is the owner of Whitman Masonry in Raleigh, North Carolina.  Ten years after graduating from Virginia Military Institute with a degree in civil engineering, he bought half of Whitman Masonry from the company founder, Johnny ”Mackie” Whitman, and helped grow the company from 14 employees to an average size of 50 to 75.  Upon Whitman’s retirement, Burton purchased the other half of the company, which serves the Triangle area. 

Photos courtesy Whitman Masonry