Sophisticated project owners and developers pick premier contractors who are principled, are socially responsible and develop their workforce. They know that contractors who build lasting, high quality employee relationships and career paths for their craftspeople consistently deliver the best value and results. Their practices produce tax revenue and stability to communities while also lowering social service burdens.

Knowledgeable owners and developers avoid using contractors who are are unprincipled and who use misclassified or undocumented workers who are often paid in cash and lack the skills, long-term commitment and support necessary for producing top quality work. They know these second-rate practices not only lead to poor results and hidden costs but also have social consequences in their communities including uncollected taxes, increased social services costs and lower incomes.

What do socially responsible contractors get in return for being responsible?

Do "socially indifferent" or "socially irresponsible" owners, developers and contractors in your community face consequences to their reputation and business?

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

“Jill Wells, an official of Engineers Against Poverty, an advocacy group in Britain, described the guidelines issued by CH2M as commendable. But, she said, the company’s actions were unlikely to have much practical impact because construction companies passed responsibility for worker welfare down to subcontractors.

“What the main contractors do is pass the risk down the subcontracting chain, and it is the workers on the bottom of the chain” who bear it, Ms. Wells said.” (New York Times)

The New York Times reported this week that the 2014 DLA Piper report on the mistreatment of workers on the construction sites for the 2022 World Cup has resulted in few changes even though the FIFA scandal and the concerns of Qatar were thought to bring about major changes.    Read more » about More Hearings on the FIFA Scandal

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

A New York Times report this week digs into why construction deaths have been rising in New York. The numbers are unfortunate and they underscore the need for better-trained craft professionals on jobsites in NYC and all around the world. From the report:

"Eight people have died in construction-related accidents this year, according to the city’s Buildings Department, as many as in all of 2014; the year before, three died. Not since 2008, during the height of the last building boom, has the number of construction accidents been so high, when a rash of episodes, including two falling cranes, claimed 19 lives.

The number of accidents has also been on the rise, with 231 in 2014, up 24 percent from the year before. (Accident figures for 2015 were unavailable.)"   Read more » about NYT reports that construction deaths are on the rise in New York City

The news team at WFAA Television in Dallas/Fort Worth has done an oustanding job of highlighting the problem of worker misclassification. In their latest installment, reporter Byron Harris focuses on the story of Belen Valasquez:

"He has a vague memory of the construction fall that paralyzed him.

"I think I fell with my head doubled over," he said in Spanish. "I felt like I couldn't breathe. I got the wind knocked out of me."

Velasquez faces a lifetime of medical care that could total more than $11 million. He is now a tetrapelgic: He can't move his legs, and can barely move his arms.   Read more » about WFAA Report: Independent contracting costs workers and taxpayers [VIDEO]

In an explosive investigation that drew the attention of many average Texans over the weekend, WFAA Television in Dallas/Fort Worth put a bright spotlight on the problem of worker misclassification. It’s a problem the Construction Citizen team has exposed for years and we greatly appreciate any time other media outlets take up the cause as well.

This most recent outrage came to light after three men working as independent subcontractors underneath Thanksgiving Tower in Dallas died in a horrific accident. But, the companies involved have denied damages to their families. How can that be? From the story:

Although they were little more than laborers, the State of Texas allows them to be called "independent contractors." That means they can get no workers compensation, and have no federal income tax or Social Security tax deducted from their paychecks.

Three independent contractors' deaths at Thanksgiving Tower are the subject of legal action, but the families of the three men will receive no compensation for their deaths. Byron Harris has more on the "invisible workers."   Read more » about DFW Television Report Puts Spotlight on Worker Misclassification

Editor's note: As President Obama’s most recent executive order on immigration is challenged in the courts and state lawmakers consider where to codify former Texas Gov. Rick Perry’s executive order on E-Verify, we thought it would be helpful to employers to offer the analysis of one of the nation’s foremost immigration attorneys. Charles C. Foster has advised Presidents Bush and Obama on the issue. Below, his analysis of how things may play out in the longhaul is offered for your consideration – The Construction Citizen Team.

“The arc of history is long but it bends towards justice.” - Dr. Martin Luther King Jr.

Even the most ardent critics of President Obama’s executive actions on immigration must acknowledge they are undeniably sweeping, historic in scope and will have a huge impact on the large undocumented long-term residing population of the United States with one or more U.S. citizen children or children who are Lawful Permanent Residents.    Read more » about Immigration Executive Orders from Rick Perry and President Barack Obama: What They Mean for Texas

Construction firms and labor advocates alike have now told state lawmakers they are in favor of a proposal under consideration at the Texas Capitol to create a searchable database of employers convicted of stealing the wages of their workers.

Rep. Mary González, D-Clint, told the Texas House Business and Industry Committee during a public hearing that the current version of her legislation, House Bill 94, is the result of collaboration with business interests, workers’ rights advocates and Republican lawmakers who want to protect ethical employers and workers as well.

Former Republican Rep. John Davis, R-Clear Lake, helped the El Paso-area Democrat craft this legislation along with Rep. Cecil Bell, R-Magnolia, and Rep. Jim Murphy, R-Houston.

"Wage theft is bad for good business," González said.    Read more » about Business and Labor Join Forces in Push to Crack Down on Wage Theft in Texas