During the battle over a crackdown on worker misclassification in the Texas Legislature this year, I was struck by some of the testimony from business owners who had never been previously politically involved. As the process played out, one thing that was clearly happening was the emergence of new leaders in the fight against what many have called a "scourge" in the industry.
One of those who stood out in particular was Michael Beeter, CEO of BRI Roofing & Sheet Metal in Fort Worth. He told a Texas House committee that he’s often in a no-win situation because the people who are cheating don’t face any penalties in Texas. "You have a choice to follow the law or not follow the law," he said. "The choice that we made as an employer is to have employees, and there's a major investment that takes place with having employees in the construction industry."
Wanting to hear more of his story, I traveled to Beeter’s office in far north Fort Worth to sit down with him and ask why he felt it necessary to take a stand. Without missing a beat, he said, “It was time to start speaking up.”
Beeter talked about the fact that in North Texas, he’s often seeing companies win bids by submitting numbers that reflect the business model many have labeled as “cheating.” That is, those companies are using independent subcontractors for labor while BRI and companies like it pay their people as employees. Those other companies are skirting the law, avoiding payroll taxes, and are able to underbid a company like BRI by as much as about 30 percent. Beeter said that even though the legislature didn't take a wider approach to cracking down on those that misclassify their workers, he was very encouraged to see others speaking out as well. “I was blown away by the fact that there are lots of other people out there that think the same way that I think,” Beeter said.
"BRI is a company that’s driven by employees. There’s a huge investment that we make in our employees.” He said that includes recruiting, skills training, a safety program and benefits packages that include 100 percent of the health insurance for his workers. “Those that are operating with independent contractors don’t have any one of those investments."
As we've noted, Governor Rick Perry did sign a targeted crackdown on misclassification that will require the Texas Workforce Commission to root out cheating on government contracts. Beeter and other see it is a positive first step.
Beeter said that if the state doesn't start to turn the corner on this, there will be long-term repercussions for the workforce and the industry as a whole. “As an independent contractor, you’re on your own. If I was a young person looking at careers, that wouldn’t be very attractive as a career,” he said. “To me, there has to be an investment by companies in their employees to create the workforce five, ten, fifteen, twenty years down the road. A decade from now it might take a general contractor twice as long to build a project than it would today. There’s not going to be any workers."