When the private sector does not address a major issue, the public sector will often step into the vacuum and do it. The construction industry has been slow to embrace the principles of social responsibility and sustainable value, focusing instead on whatever it takes to be lowest bidder. As a consequence of this, government is adopting policies that reshape the rules for the industry.

More than two dozen states have now agreed to cooperate closely with the federal government to crack down on what’s known as “worker misclassification.”

Sometimes known as payroll fraud, worker misclassification has been called a “cancer” in the construction industry and other sectors of the economy as well. “Because of weak enforcement mechanisms, there are virtually no tangible consequences for violating the law,” said Professional Janitorial Services executive Don Dyer during a Texas House committee hearing on the subject last year. So far, Texas has taken a targeted approach to the problem but many advocates say it is simply not enough.    Read more » about Another state signals it will get serious about worker misclassification

Two men in Georgia have been arrested on federal charges that they intentionally misrepresented the employment classification of construction workers on a project for the Centers for Disease Control, which is headquartered in Atlanta. Cesar Arbelaez Tabares and Juan Carlos Bazantes were arraigned after prosecutors said both men "committed fraud in connection with a construction project" for the CDC.

Prosecutors said the men engaged in a somewhat elaborate scheme to defraud both the CDC and the Internal Revenue Service. Their actions caused IWES to fail to report over $800,000 in wages to the IRS, investigators said.    Read more » about Federal Charges Filed in Connection with Alleged Payroll Fraud Scheme in Georgia

The administrator of the Department of Labor’s wage and hour division, Dr. David Weil, this week issued an administrative guidance document aimed to curb the misclassification of workers as 1099ers or independent contractors rather than employees. We would urge that you review it carefully, especially those of you in the construction industry.

This document comes out in the middle of an on-going argument over the misclassification and mistreatment of workers as reported on here in previous posts. The document entitled, “The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors” is sure to create a number of new questions especially in the new economy workforce.

The document begins by defining Misclassification.   Read more » about Department of Labor Administrator on Misclassification of Workers

Donald Trump has been losing business left and right because of his harsh rhetoric on immigration. He’s also been gaining in the polls in his bid for the White House. More than 10 companies and organizations immediately cut business ties with the GOP presidential contender after his announcement for president in which the billionaire accused Mexico of sending murderers and rapists across the border into the United States.

In statements following his original comments, Trump doubled down and then tripled down, saying: “What can be simpler or more accurately stated? The Mexican Government is forcing their most unwanted people into the United States. They are, in many cases, criminals, drug dealers, rapists, etc."   Read more » about Donald Trump’s Construction Worker Problem

Federal agencies with oversight over various industries are taking the problem of worker misclassification more seriously and are taking steps to rein in as many bad actors as possible, according to various reports.

Worker misclassification, as you may know, happens when a company pays employees as independent subcontractors with the intent of skirting payroll taxes and denying benefits like health coverage. There are many legitimate uses of contract labor, of course, but the problem arises when companies use the classification to gain an unlawful competitive advantage and to deny basic protections for craft professionals and others. Companies that cheat on their payroll taxes can easily underbid law-abiding contractors by as much as 30 percent or more because of their illegitimate savings on labor costs.    Read more » about Report: Federal government is getting more serious about cracking down on worker misclassification

The president of FIFA, Sepp Blatter, resigned today after being re-elected in the midst of an unprecedented scandal over the awarding of the 2022 World Cup to Qatar.

Scandal is not new to the global scene, nor is the seedy underbelly of the construction industry in the countries where major facilities are needed to host the games. In this case, there are five stadiums being built for Qatar 2022, but recently, amid the scandal, the underbelly of global construction has once again been exposed in an investigative report by Australian Broadcasting Corporation (ABC).

In a recent article by ABC, the kafala system of forced labor, “kin to slave labor” even though the world’s richest per capita country, “is spending $260 billion building the stadiums, public transport systems, freeways, hotels and apartments to stage the tournament.”    Read more » about Scandal and Slum Conditions in Qatar for 2022 Games

House and Senate negotiators in Austin are now trying to hammer out a final deal on the financing of $3 billion worth of construction projects at colleges and universities all over Texas.

There is broad agreement that funding new classroom space is the right thing to do. On a vote of 26 to 5, the Texas Senate passed a bill authorizing the spending aimed at relieving overcrowded campuses. The Texas House also overwhelmingly passed the legislation. But, just as in past legislative sessions, the devil’s in the details when it comes to this issue.

As of right now, about $73 million separates the two plans. That’s why a conference committee has been appointed to craft a deal that will then be presented to both the House and Senate before it can be sent to Gov. Greg Abbott for his signature.    Read more » about $3 Billion in College Construction is Approved by the Texas Senate

There’s a renewed push at the Texas Capitol to prevent people from skirting their responsibility to make child support payments through misclassification. Worker misclassification, also known as "payroll fraud," causes all kinds of problems throughout the construction industry and our society.

Misclassification happens when employers pretend their workers are "subcontractors” even though, by law, they meet the definition of an employee. You can read every story we’ve written about it by clicking here.

When unethical companies do this the intent is to avoid payroll taxes and benefits, which gives those employers an unfair and illegal competitive advantage over companies that are following the letter of the law.    Read more » about Bill Gains Momentum in Push to Crack Down on Those Who Avoid Child Support Payments by Becoming “Subcontractors”

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