GOV. HICKENLOOPER SIGNS EXECUTIVE ORDER TO IMPROVE PAYROLL AND WORKER CLASSIFICATION IN CO CONSTRUCTION INDUSTRY (CO)

Posted by National Alliance for Fair Contracting on July 12, 2018

Office of the Governor
June 5, 2018

DENVER – Wednesday, June 6, 2018 – Gov. John Hickenlooper has signed an executive order creating a joint task force including employer and employee groups to better address payroll and worker misclassification in Colorado’s construction industry.

Misclassification of employees as independent contractors and other labor law violations disadvantage both law-abiding construction contractors and construction workers in Colorado. Some labor brokers within Colorado’s construction industry have been found to have purposefully misclassified workers to avoid paying unemployment premiums and payroll taxes.

“Law-abiding companies and workers are being undercut by those who skirt the law in Colorado,” said Governor John Hickenlooper. “This task force will bring all parties together to find the right solutions to root out any illegal labor activity in our state.”

“Payroll fraud in the construction industry hurts workers and honest businesses,” said Randy Thornhill, Executive Secretary-Treasurer, Southwest Regional Council of Carpenters. “The first step in tackling this issue is evaluating current enforcement practices. With this executive order, the governor’s commitment to building a better economy is clear. His leadership on these issues will lead to a cleaner industry and safer workplaces.”

The Joint Enforcement Task Force on Payroll Fraud and Employee Misclassification in the Construction Industry will coordinate with relevant state agencies to share information and streamline investigations around alleged misclassification of workers. The task force also will coordinate with business, labor and community groups.

“We are going to hit the ground running to convene key stakeholders in order to ensure across the board compliance with Colorado’s labor and employment laws, particularly in the commercial construction industry,” said Sam Walker, executive director of the Colorado Department of Employment and Labor. “Consistent and effective enforcement of our laws and regulations is a win-win for law-abiding companies and their workers. By collaborating with the other state agencies on this task force, as well as with workers and contractors within the industry, I know we’ll be able to identify areas for improvement so that our State’s labor and employment protections work as they should throughout Colorado’s booming construction sector.”

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New Jersey Passes Laws on Sick Leave and Pay Equity; Will Tackle Worker Misclassification (NJ)

Posted by National Alliance for Fair Contracting on July 12, 2018

The National Law Review
Wednesday, May 9, 2018

A little more than 100 days into his tenure, New Jersey Governor Phil Murphy has made it clear that employment is one of his top priorities. In the past two weeks, Gov. Murphy has signed a Paid Sick Leave and an Equal Pay bill into law and established a Task Force on Employee Misclassification.

Paid Sick Leave

The New Jersey Paid Sick Leave Act was signed into law on May 2, 2018, and takes effect on October 29, 2018. It will require New Jersey employers of all sizes to offer their employees one hour of sick leave for every 30 hours worked.

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Task Force on Employee Misclassification

On May 3, 2018, Gov. Murphy signed an executive order establishing a Task Force on Employee Misclassification. Misclassification is when workers are incorrectly labeled as independent contractors rather than employees. Workers who are incorrectly classified frequently are not provided benefits and other protections available to employees, such as minimum wage, overtime compensation, family and medical leave, unemployment insurance, and workers’ compensation.

The New Jersey Task Force will be charged with a number of responsibilities to combat employee misclassification, including:

Examining and evaluating existing misclassification enforcement by executive departments and agencies
Developing best practices by departments and agencies to increase coordination of information and efficient enforcement
Developing recommendations to foster compliance with the law, including by educating employers, workers, and the public about misclassification
Conducting a review of existing law and applicable procedures related to misclassification

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Delaware legislature strikes down county-by-county Right to Work efforts (DE)

Posted by National Alliance for Fair Contracting on July 12, 2018

Delaware House passes bill stalling the state’s anti-labor movement

(PR NewsChannel) / June 26, 2018 / DOVER, Del.

Last week, Delaware legislators passed a pivotal bill stopping the state GOP’s Right to Work movement in its tracks.

Approved by a vote of 25-13 along party lines, the Delaware House voted to guarantee the right of private employers to enter into labor deals that require their employees to join a union. The bill effectively blocks the GOP effort to pass the controversial legislation on a county-by-county or town-by-town basis.

“The Governor strongly believes that one of the best ways to stand up for Delaware’s workers is to protect their right to organize, earn a good living and support their families,” said Jon Starkey, spokesman for Gov. John Carney.

Labor supporters agree, citing the number of states suffering under Right to Work as reason why legislators in Delaware made the right decision.

“Implementing Right to Work is attempting to put out a fire with gasoline,” said Richard Dalton, business manager for the International Union of Operating Engineers (IUOE) Local 18 in Ohio. “Business owners will prosper while workers remain unchanged, possibly even worse off than before.”

Studies conducted over the last decade have repeatedly shown Right to Work to have little impact on a state’s economy.

In 2011, the Economic Policy Institute (EPI) conducted a multi-part study. Their first major finding was that, on average, full-time workers in Right to Work states earned 3.1% less than those in unionized states. That same year, New Hampshire and Indiana’s legislature considered implementing a new law. Indiana passed Right to Work while New Hampshire didn’t receive enough support. Although New Hampshire’s economy was stronger from the start, Right to Work did nothing to close the performance gap with Indiana.

A study in 2017 expanded upon EPI’s research to find that Right to Work harms job growth and union performance as well.

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Will ending union wages on Michigan public projects save money, or just lower pay? (MI)

Posted by National Alliance for Fair Contracting on July 12, 2018

Lindsay VanHulle
June 12, 2018

Michigan Republicans last week narrowly repealed a 53-year-old state law that required contractors on public construction projects to pay union-rate wages and benefits.

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To Democrats and union members in the building trades, who erupted in anger after the vote tally was read, repealing the prevailing-wage law was yet another GOP-sponsored attack on working people – at a time when many Michiganders still feel like a decade-long recovery hasn’t helped them.

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The argument that repealing the law would make it harder to recruit people into the trades is one of a litany of criticisms offered by repeal opponents, who predict lower wages and no savings on state construction costs.

Will any of that happen in Michigan without prevailing wage?

Bridge asked two researchers, whose studies have been cited as evidence on both sides of the prevailing wage debate, to project what may happen in Michigan in the years ahead.

Frank Manzo IV is the policy director for the nonprofit Midwest Economic Policy Institute, an associate of the Illinois Economic Policy Institute. He has studied the effect of repealing prevailing wage, mostly recently in Indiana, and found it did not save money on construction projects and lowered worker wages. The group’s board of directors includes people who work primarily in the construction industry, including contractors and labor representatives.

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From your research, as a result of last week’s vote, what do you predict Michigan will look like five years from now?

Manzo: He said his group’s January study from Indiana found that repeal of that state’s “common construction law” in 2015 led to less-skilled workers in the field, more worker turnover, less productivity and lower wages.

Expect similar results in Michigan, he said.

“Any purported savings don’t materialize because productivity declines,” Matzo told Bridge.

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Seventh Circuit Revisits Contractor Misclassification

Posted by National Alliance for Fair Contracting on July 12, 2018

Thursday, June 28, 2018
Hannesson Murphy

Courts in the U.S. have been grappling with the misclassification of independent contractors for more than 20 years. As our readers well know, there is no standardized test to determine whether a worker is a contractor. Various courts and government agencies all have adopted their own criteria. Fortunately, most of them overlap, but there can be critical differences in the factors and how they are applied.

In 2015, the Wage and Hour Division of the U.S. Department of Labor (DOL) firmly supported the “economic realities” test as part of a government sponsored misclassification initiative. While not breaking new ground by adopting the test, the DOL’s pronouncement did create somewhat of a splash at the time because it deliberately downplayed the relative importance of control over a worker – which previously had been viewed as the most important aspect of the contracting relationship. See Administrator’s Interpretation No. 2015-1 (July 15, 2015). In the years since its issuance, the DOL’s advisory opinion largely has been sidestepped by several tribunals charged with examining the issue in favor of their own well-worn standards.

A decision by the Seventh Circuit last week, Simpkins v. DuPage Housing Authority, appears to be the latest in that trend. In the case, Anthony Simpkins dutifully signed “independent contractor agreements” with the DuPage Housing Authority, in 2009 and again in 2012, to perform general labor, such as carpentry, maintenance, demolition and remodeling, on some vacant properties to get them ready for new occupants. This was a full time job, but provided no benefits and Simpkins was responsible for his own taxes. While the housing authority claimed he had the discretion on how to perform the job as he saw fit, the housing authority directed him on which jobs to perform and prioritized the order in which he would need to complete them. Simpkins objected to his status and repeatedly asked to be reclassified as an employee so he could get benefits, but his efforts were rebuffed.

After Simpkins was injured in a car accident, he filed suit to recover unpaid overtime and disability benefits under the FLSA, as well as under Illinois state law. The district court agreed with the housing authority that Simpkins was a contractor and granted summary judgment. On appeal, however, the Seventh Circuit reversed.

Month: July 2018