2013 Texas Legislative Session - Want to Stop the Magnet? Demand a Vote on House and Senate Worker Misclassification Bill
by Bob Price on April 18, 2013 at 11:52 AM
Texas Senator John Carona (R-Dallas) has been working hard for several years trying to get the State of Texas to enforce the existing laws on employee misclassification and add some teeth to the current laws by increasing the penalties for misclassifying workers as independent contractors when they are truly employees. Misclassification is also one of the biggest ways unethical employers skirt employment law and give jobs to illegal immigrants who work as day laborers.
Last week, I reported on a hearing held in the Texas Senate on Sen. Carona's bill, SB 676. While no one spoke in opposition to the bill, and commercial construction associations and the Texas Association of Businesses supported the bill, rumblings were in the air about possible backroom dissent coming from home builders. Specifically, we were hearing that Perry Homes and David Weekley Homes were working behind the scenes to block the bill. We asked you to contact the members of the committee to let them know we need to put all employers on a level playing field, and we heard this week your calls were effective.
This week TexasGOPVote reported that the House was having hearings on Chairman John Davis' (R-Houston) HB 1925 which contains the same wording as Sen. Carona's SB 676. Those hearings were held today and the home builders lobbyist came out with guns blazing. Perhaps your pressure on the committee was interfering with their smoke-filled backroom deals forcing them into the light of day. Well, here we go...
Steve Henry was speaking for the Leading Builders of America (LBA). LBA is a trade group which represents Weekley and Perry Homes. He weakly (not Weekley) made the point that forcing home builders to actually, well, follow the law, would make housing prices go up. Additionally he was concerned that the bill would increase litigation and stifle job creation. Mr. Henry, why should home builders be any different from any other company that uses manual labor? Are you somehow special and above the law?
According to ConstructionCitizen.com, Andrew Turner (representing the same trade group) said it is "confusion of an already confusing area of the law." He went on to claim the Texas Workforce Commission already has the ability to deal with misclassification. Well Mr. Turner, what are you worried about then?
What he is worried about is that there is no penalty of any deterrent level in the existing laws and that is what we seek to change. Why should they follow the law if there is no real penalty for breaking it?
According to a Quorum Report article on the hearing, Turner's issue was that from a cost standpoint, that means that companies would be on the hook for payroll taxes.
Really? That's his argument? Are Turner and the home builders complaining that they might have to pay their fair share of taxes under the law? Is they saying that employment and labor laws don't apply to the home building industry? Really? Aren't cars and most everything else we buy more expensive because employers have to match payroll taxes. What a lame argument.
Day labor sites like this serve as a magnet for illegal immigrants who are illegally hired by companies that misclassify them as independent contractors instead of employees.
It is interesting to note that LBA is a Washington, D.C. group and that no Texas group has expressed opposition to this Texas bill. The Texas based associations testifying or registering in support of the bill were Associated Builders and Contractors of Texas, Associated General Contractors – Texas Building Branch, Carpenters Union, Plumbing-Heating-Cooling Contractors, Texas AFL-CIO, Texas Building Trades, Texas Construction Association, Texas Contractors for Fairness, and Workers Defense Project.
Chairman Davis seemed more than a little frustrated with the home builders who seemed to be making flimsy excuses for breaking the law. At one point when the builders were explaining that it is common practice to hire "contractors" for two weeks and then move on to the next project, Davis asked a very common sense question, asking why they didn't simply hire them as employees and move them from project to project. Makes sense to me, how about you?
The home builders also did not seem to be up to speed on the latest version of the bill as they referenced issues that are no longer part of the bill. Raymond Risk, Texas Construction Association, president, told the committee the new bill language does not create any new regulations. It simply creates penalties for violating the existing regulations and laws. Why would we pass laws that had no meaningful enforcement? “The law is not changing in determining who is an employee or an independent contractor. That doesn't change at all," Risk said.
The owner of Dallas based Linden Steel, Andy Anderson, told the committee what happened to his company in the Mansfield ISD project. This project was reported on by TexasGOPVote and was exposed by WFAA in Dallas. He strongly urged the committee to vote in favor of HB 1925. Other companies reported being in a no-win situation explaining that companies cheating the system are forcing them to either lose business by following the law or join the unethical companies in breaking the laws.
Both the House bill and Carona's Senate bill are pending committee. We need your voice to be heard in Austin to move these bills forward and fix a problem that is costing taxpayers millions of dollars in lost tax revenue, forcing ethical companies to lose business to companies that cheat our system of laws and a problem that is a major magnet for illegal immigrant jobs.
Please call the members of the House and Senate Committees and ask them to have a vote on these bills.
Please call these state representatives and ask that they have a vote on HB1925 and that they vote YES!
Chair John Davis: (512) 463-0734
Vice Chair Hubert Vo: (512) 463-0568
Rep. Paul Workman: (512) 463-0652
Rep. Cecil Bell: (512) 463-0650
Rep. Yvonne Davis: (512) 463-0598
Rep. Jason Isaac: (512) 463-0647
Rep. Jim Murphy: (512) 463-0514
Rep. Mary Ann Perez: (512) 463-0460
Rep. Eddie Rodriguez: (512) 463-0674
Below is a list of senators whose votes we need to pass SB 676 out of committee. Ask them to schedule a vote and pass SB 676.
Senator and Chairman Bob Deuell : (512) 463-0102
Senator Brian Birdwell : (512) 463-0122
Senator Kelly Hancock : (512) 463-0109
Senator Kevin Eltife : (512) 463-0101
Senator Troy Fraser : (512) 463-0124