Construction, Misclassification, Wage Theft and Illegals

The construction industry offers a panoply of situations and conflicts associated with hiring workers and running a business responsibly and lawfully. Construction Citizen exposes these issues and the companies who do it right... as well as those who don't. In Responsible Hiring - It's Not Always Easy, Houston contractor Drew Evans tells a news crew that his decision not to hire illegal aliens cost him jobs, which end up going to contractors who underpay their workers and therefore submit lower bids for projects. While Mr. Evans is trying to do things the right way, construction citizens are documenting, on video, some questionable workplace practices of other contractors.

Mr. Evans' problem is serious for U.S. businesses and their communities. The issue of wage theft, or pay-related violations in the workplace, is widespread in industries including construction, food manufacturing, restaurants, janitorial services and health care. It affects lawful workers and illegals alike. While many construction companies try to do things right, other less responsible companies often hire workers as independent contractors when the workers should actually be classified as employees. This practice, also known as "misclassification", makes it easier for companies to hire illegal aliens.

Now states are taking matters into their own hands (sound familiar?) on the issues of wage theft and worker misclassification. States such as Nebraska, Ohio and New York are working on employee misclassification prevention legislation to crack down on the practice of misclassifying workers, who should be classified as employees, as independent contractors. On wage theft, the State of Illinois has recently made changes to its employment laws, including a stronger role for the Illinois Department of Labor and the possibility of Class 4 Felony charges for repeat offenders.

Are actions by the state legislature what it's going to take to incentivize businesses to act lawfully and responsibly when hiring workers? In Texas, that would certainly help stop the competitors of Mr. Evans from low-ball pricing based on misclassification, wage theft and hiring illegals. That would in turn help Mr. Evans compete with construction contractors on a basis of workmanship, quality and value!

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The problem goes well beyond misclassifying workers as independent contractors.  More often than not construction workers are paid entirely off the books--no reporting to state or federal authorities or to workers' comp. carriers.  It's fraud that victimizes law abiding businesses and taxpayers.  And not only that, arrangements frequently involve criminal conspiracies between contractors and their labor subcontractors, check cashing stores, accountants and others.  Crimes committed include: money laundering, grand theft, mail fraud, wire fraud and racketeering.  It's about time we start standing up for law-abiding businesses.
 

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