Will ObamaCare Create "Illegal Labor" as Companies Take Their Workers Off the Books?

Unlicensed Workers - MisclassificationWith issues related to ObamaCare, more and more companies are looking for ways to get workers off their books. Will employee misclassification become an even bigger problem as companies seek to stay below 50 employees or otherwise reduce healthcare related expenses? Misclassification of workers as independent contractors has been rampant in Texas as we have been reporting for several years. Each session, the Texas Legislature gets closer to doing something about the problem but doesn't quite get there.

This year a new law was passed by the Legislature and signed by Gov. Rick Perry, but it was a long way from where we need to be in terms of enforcement strength of existing laws. As companies seek to hide workers from ObamaCare regulations, this kind of legislation becomes even more important as a means of keeping the playing field level for all companies.

Construction Citizen has discovered a new watchdog in the fight against illegal hiring of workers - what he calls "illegal labor," and he isn't talking just about illegal immigrants. Construction worker John Jackson is becoming a one-man task force on finding and reporting companies who are working their employees illegally.

The Construction Citizen article quotes a report from the Phoenix, Arizona Nightly News and includes the video interview below. This short video does one of the best jobs I have seen in explaining why misclassification and payroll fraud are such important issues, not just to construction companies, but to all of us as taxpayers. 

This article reminded me of a book I wrote about last year by another industry watchdog, Ricardo Charles (a Hispanic carpenter), enitled Mexican Cliques. The book describes unethical practices in the construction industry related to hiring practices, kickbacks and bribes.

As part of my continuing series on employee misclassification, I met with Mr. Charles and found out what his story is really all about. What I found was a very credible man who is deeply concerned about an industry he loves, construction, and what is being done to destroy that industry in the name of greed and racism.

I asked Mr. Charles how this situation developed. He told me,"Corruption has been going on inside the plants for many years, but today's workforce comes with a culture of bribes. The Mexican culture of bribery makes it hard for ordinary citizens to be part of the workforce. However, these cliques help the employers by controlling the job sites by driving out 'unwanted' new workers. Anybody who disagrees with an unlawful act gets terminated."

"The traditional way of hiring through human resources has changed. Corrupt supervisors and managers inside do the hiring and firing giving preference to relatives and friends who, on occasion, pay to obtain the job. The employee of choice is the one who can be manipulated and does not report criminal acts. Eventually these type of workers join the existing group adding more crime into the system." Charles continued.

The construction industry still has a very long way to go to clean up its industry and help continue a sustainable workforce capable of serving the economic needs of a rapidly growing state like Texas. The work of Mr. Jackson and Mr. Charles is commendable. Now if we could just get the Texas Legislature and certain home builders to take the issue more seriously. During this primary season, ask your state representative and senate candidates what they know about employee misclassification and unethical business practices. Just be prepared for them to look a little faint as the blood rushes from their heads. 

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