September 9, 2014 Kim Krisberg 0Comment

Across the country, roughly 10 million construction workers spend each day in a dangerous and fickle industry. They hang drywall, lay carpet, shingle roofs. Yet in the eyes of their bosses, they aren’t employees due the benefits the government requires.

That’s the intro to an extensive series of articles that McClatchy DC recently published called “Contract to Cheat,” which chronicles a year-long investigation into the consequences of misclassifying workers as independent contractors and how government regulators are doing nothing to stop it. The in-depth series offers investigations from seven states — California, Florida, Illinois, Missouri, North Carolina, South Carolina and Texas — and chronicles how the 2009 federal stimulus package was “riddled with a massive labor scheme that mistreated thousands of vulnerable workers and cheated unsuspecting U.S. taxpayers.” In one of the series’ articles, reporters Mandy Locke and Franco Ordoñez write:

A review of public records in 28 states uncovered widespread cheating by construction companies that listed workers as contractors instead of employees in order to beat competitors and cut costs. The federal government, while cracking down on the practice in private industry, let it happen in stimulus projects in the rush to pump money into the economy at a time of crisis.

Companies across the country avoided state and federal taxes and undercut law-abiding competitors. They exploited workers desperate for jobs, depriving them of unemployment benefits and often workers’ compensation insurance.

Exactly how much tax revenue was forfeited on stimulus projects isn’t clear. This is: The government enabled businesses bent on breaking the rules. Regulators squandered the chance to right a rogue industry by forcing companies’ hands on government jobs.

In an accompanying article examining the experience of immigrant workers, Locke and Ordoñez found that in southern states, as many as a third of construction workers are misclassified as independent contractors, with immigrants being the most susceptible. In interviewing hundreds of workers, the reporters found numerous instances of mistreatment, including stories of workers having to pay a fee to use protective gear such as hard hats and steel-toe boots. Among the stories they collected:

“It makes me feel invisible,” said Camilo Loyola, a Mexican immigrant who moved to North Carolina more than 20 years ago. During two decades in the construction industry, Loyola has been shortchanged on wages and deprived of tax forms, he said. In 2011, he worked on a government-financed project in Raleigh and was improperly treated as an independent contractor. He knew it was wrong, but he needed to keep the money flowing for his family.

Armando Sanchez, a Mexican immigrant who became a U.S. citizen, helped build an affordable housing complex in Jacksonville, N.C., in 2010. He said he was treated as an independent contractor and shortchanged on the hours he worked. “These days, you work for less or you don’t work at all,” he said.

Samuel Mora worked with a crew his father assembled at an affordable housing complex in Fayetteville, N.C. Sometimes, he said, it took weeks or a month for his father to be paid and then to distribute cash to his workers. No one bothered to define what they were, but records show Samuel Mora was treated as an independent contractor. He was resigned to the realities of working in construction in America.

However, the series also highlighted efforts to stop misclassification. Reporters Mike Fitzgerald and Ryann Grochowski Jones wrote about actions in Illinois and New York to curb such labor law violations. They found that:

While North Carolina and other Southern states have misclassification rates on publicly financed projects approaching nearly 40 percent, the reporters in Illinois and New York combed through payroll records for dozens of projects and found not one instance of a company wrongly listing its employees as independent contractors.

It’s no accident. Illinois and New York have passed hard-nosed laws and formed task forces to take an aggressive tack toward employers who misclassify their workers.

Read the entire “Contract to Cheat” series here.

In other news:

The Sacramento Bee: California lawmakers recently passed legislation that would give workers three paid sick days a year, however the run-up to the vote splintered supporters. Reporter Christopher Cadelago writes that the bill lost the support of major unions, including Service Employees International Union, after it was revised to exempt home health care workers from receiving the benefit. In responding to the revision, state Sen. Holly Mitchell, D-Los Angeles, told Cadelago: “This is B.S. …This is yet another example where a female-dominated industry, that has taken disproportionate hits during the state’s fiscal crisis is once again being, quite frankly, disrespected.”

NIOSH Science Blog: CDC’s National Institute for Occupational Safety and Health celebrated N95 Day last week with a theme of “Respiratory Preparedness: Where Technology Meets Good Practices.” In the blog post, author Jaclyn Krah explains the theme: “It’s what we do as the nation’s personal protection equipment research, surveillance, standards development, and certification laboratory joining together with what you do in your workplace in order to build a safe working environment and culture.” The blog links to a number of useful resources, such as video explainers on respirator certification and what it means to be NIOSH-approved.

In These Times: Union activists staged a sit-in at an Apple store in San Francisco to protest the use of non-union subcontractors in hiring security guards. Reporter Julia Wong writes that the demonstration, which was organized by United Service Workers West, called on Apple to “use responsible contractors who allow workers to have a voice on the job.” The article cites previous report findings that a majority of security guards in Santa Clara (also known as Silicon Valley) aren’t benefiting from the tech industry boom and most don’t even receive paid sick leave. Wong quotes the Working Partnerships report: “If tech companies are serious about building a pipeline from K-12 schools for a more diverse tech workforce it starts with paying their parents a livable wage.”

Huffington Post: Last week, fast food workers around the nation went on strike to call for a living wage. Writer Jillian Berman reports that about 500 people were arrested during the demonstrations in communities from New York City to Kansas City to San Diego. However, the fast food strikes didn’t only happen in the nation’s metropolitan communities. For example, Berman writes that in Charleston, S.C., “the fact that it was happening at all in South Carolina took onlookers by surprise. The state has the third-lowest union density in the nation, with little of the organized labor infrastructure that often helps lead a wage protest.” In a related commentary, economist Paul Krugman knocks down arguments that raising the minimum wage will force companies to lay off workers in this video posted at Business Insider.

Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for more than a decade.

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