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Political Update

Indiana

2021 has been another successful year for Indiana politics. The IKORCC managed to harvest a great relationship with the Indiana Association of Public-School Superintendents (IAPSS) and received an invitation to go on tour with them for all eight of their district meetings. During the tour, we were introduced to public school superintendents in all 92 counties. In addition, we were given the opportunity to talk about our Door Safety Inspection (DSI) Program and Career Connections.

One of our many focuses was on getting more “Responsible Bidder Language” added into front end bid specs with school corporations. During the 2021 year, we were able to obtain an additional two agreements with the Metropolitan School District of Boone Township and Concord Community Schools.

Other events worth mentioning that took place during the 2021 year are several successful meetings with political figures regarding laws being introduced to support ICRA training requirements being put in place if any work is being done in occupied health care facilities or schools that may have students present. Also, the City of Indianapolis has promised to make tax fraud and worker misclassification its number one priority for 2022. This commitment came directly from Mayor Joe Hogsett during a public speech that he gave to the city.

During the Delegates conference, Senator Fady Quadra (left) spoke to the membership and explained his level of respect for the Carpenters Union and other organized labor affiliates. He affirmed that he would carry the Carpenters ICRA legislation in 2022.

Due to line redistricting, a Senate seat for District 46 has come up for grabs. We have successfully sourced a candidate that is a card-carrying member of AFSCME whom we helped get elected to the Indianapolis City County Council, to go after this open seat. The candidate has confirmed they will make it known that this seat will be a union held seat if elected. This seat will be won during the primaries due to it being a largely held partisan district.

 

Kentucky

2021 was a busy political year in Kentucky.  Even with the COVID-19 restrictions we’ve been able to build great relationships with local lawmakers and state legislators.  Our goals in Kentucky are to address tax fraud and ensure we are in the best position to secure our work with the influx of new solar projects coming to the area.

With solar, it is our hope to introduce language similar to legislation that exists in other states that would protect our work and put our contractor base in the best position possible to secure solar work.  Our solar committee, headed up Jeremy Welch and Wallace Turner, has done a tremendous job working with developers and owners to provide information to the political team. That info is vital in working with our lawmakers to sell our training and the importance of the upcoming work.

Tax fraud is a major problem in Kentucky.  1099 worker misclassification and the cash under the table business model used by non-signatory contractors has put our contractor base at huge disadvantage.  Working with our Director of Organizing Kenneth Lyons and our political team, we’ve been taking local and state legislators to job site visits to show them the impact and loss of tax revenue that is currently going on.

Now that the November local elections are over, we will actively continue to educate local elected officials about our issues.  We use our training facilities to conduct tours and plan to ramp up job site visits.  Do not discount the importance you have in actively participating to successfully reach our goals.

If you are not registered to vote please do so.  You can register online at vrsws.sos.ky.gov.  Moving into 2022 there will be very important races all across Kentucky.

 

Ohio

2021 was a challenge, politically.  Our approach in building relationships with lawmakers became more difficult as a result of the COVID-19 mandates throughout Ohio. Thankfully, we found creative ways to continue building relationships with our local and state lawmakers.  We use our four self-funded Ohio training centers as our main selling point with politicians.  We continue to take elected officials out for jobsite visits to showcase what we do and also highlight the bad jobsites where tax fraud is rampant due to the lack of legislation in Ohio.

As a result, we continue to build support from both sides of the aisle – Democrat and Republican.  We have been successful in protecting our core issues such as Prevailing Wage, Right to Work, and Unemployment Compensation.  We are now using our relationships to introduce language to address tax fraud.  Our tax fraud bill will create a Tax Fraud Commission to study the impact that paying cash under the table and worker misclassification abuse is having, not only to us but every taxpayer within Ohio.  We are aggressively lobbying on current issues to protect our work within all four refineries in the state.

Our motto has always been to Educate, Agitate, and Organize.  These very same principles are used when working with any elected lawmaker.  Our Ohio political team covers all corners of the state and we will keep every UBC member informed of legislation that may affect us.

With the 2022 election cycle upcoming we will be very busy working for current lawmakers we support and going through a vetting process for any open seats to ensure that the right lawmakers are elected.  If you are not already registered to vote, please do so.

You can register online at ohiosos.gov.  Remember that when a recommendation is made to support a candidate they are soundly in support of protecting your work, your career, and your ability to provide for your family.

‘Worker misclassification’ seen as growing threat by contractors, unions in the Region

Andrew Steele andrew.steele@nwi.com, 219-933-3241
Sep 3, 2017 Updated Sep 8, 2017

As companies strive to increase profits amid a changing economy and consumer habits, the discussion often centers on challenges posed by the “gig economy” and its impact on work and employment.

Upstart companies like the Uber ride-sharing service tend to be the focus of concern; recent reports of such companies’ drivers speaking out against perceived company efforts to trim their pay bear this out.

Online story on NWI Times

But the growing use of short-term contracts in industries such as construction is threatening traditional employment in a way some say has reached a critical phase.

The fight is over what’s commonly called “employee misclassification” — or payroll fraud, in the view of unions and contractors. It involves an employer hiring workers as freelancing contractors who should be full-time employees, thereby allowing the employer to avoid paying payroll taxes, and worker’s compensation and unemployment insurance premiums, among other costs.

“It’s a problem that’s been around for many decades,” said Dewey Pearman, executive director of the Construction Advancement Foundation of Northwest Indiana. “But it’s becoming epidemic.”

Officials with the Indiana/Kentucky/Ohio Regional Council of Carpenters visit job sites frequently to talk to carpenters, said Scott Cooley, senior representative at the union’s local headquarters. He said he often talks to contract workers who he believes should be formal employees.

“We run into it all the time,” Cooley said. “It’s just a regular occurrence.”

Some workers in question receive a federal 1099 form at the end of the year, but others aren’t reported at all, and are just paid cash for their work.

‘No magic’ in defining employment

Classifying employees properly isn’t an exact science. It involves several variables, including the degree of company control over the employee; the financial arrangement, including who provides tools and supplies; whether there are benefits such as a pension and insurance; and whether work performed is a key component of the business’ activity.

The Internal Revenue Service lists 20 factors to consider, and states in its guidance on the matter that “there is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor.”

But contractors and the carpenters’ union say some building projects are rife with contract workers who clearly are misclassified: their hours and duties are assigned by their employer, their tools and supplies are provided, and their work is a core function of the company — all factors that generally make one an employee, not a contract worker, in the eyes of the law.

Quantifying the problem

A 2010 study commissioned by the Indiana Building & Construction Trades Council and the Indiana, Illinois, Iowa Foundation for Fair Contracting argued that a company’s use of these workers gives employers who use the practice a decided, but unfair, competitive advantage.

The report, by economists from the University of Missouri-Kansas City, estimated 72,299 employers, 8,052 of them in construction, had misclassified employees in 2008. It said 15.3 percent of employees were misclassified, totaling 377,742 workers, of whom 24,323 were in construction.

The practice also has implications for governments at all levels, the study found. For the state in 2008, $30.4 million in unemployment insurance taxes were lost, $2 million of that from the construction industry.

Between $134.8 million and $224.6 million of income tax revenue went unpaid, with $10.6 million from the construction industry.

Local income tax losses statewide totaled $91.2 million, $7.2 million of that from the construction industry, according to the study. Also, $26.3 million of worker’s compensation premiums were not properly paid, with $4.6 million of that from construction, according to the report.

Ultimately, the University of Missouri report estimated the costs to the state of Indiana, at a high end, of about $406 million annually.

But a precise evaluation of the cost to government is elusive. Several state agencies charged by the state’s Pension Management Oversight Commission with doing a study of their own in 2010 disputed the methodology and assumptions of the university study.

They estimated 8 percent of workers, not 15.3 percent, are misclassified, and that the state loses $14 million to $20 million annually in tax revenue, “of which (the Department of Revenue) could be expected to recover a substantial portion.”

The report, by the state departments of Workforce Development, Labor and Revenue and the Workers’ Compensation Board, also questioned the impact on the workers’ compensation and unemployment insurance system.

Finally, the report’s writers argue that misclassification often is an innocent misunderstanding of the law. “Heavy-handed penalties will have little impact on these employers,” the report concluded.

But contractors and unions dispute these conclusions, saying the effect on their work is clear and stronger enforcement is key. When a state legislative study committee investigated the issue last year, more than 40 contractors wrote letters contending that the misclassification problem has grown to the point that it threatens the viability of construction companies that abide by the rules.

The companies included Northwest Indiana’s Berglund, Gough, Larson-Danielson, Precision, Prodigy, Solid Platforms, Specialty, Superior, and Pangere.

Misclassification “gives cheating contractors a 30 percent advantage in bidding, undermining the legitimate contracting community through low-ball bids that do not represent the cost of conducting lawful business,” wrote Timothy Larson, president of Larson-Danielson Construction Co.

Enforcement elusive?

The carpenters’ union recently had success when it filed a complaint with the National Labor Relations Board regarding a LaPorte hotel under construction. The complaint alleged that misclassification of workers impeded their ability to act collectively and form, or join, a union.

The complaint resulted in a settlement requiring the contractor to reclassify the employees and to inform them of their rights under federal law. But union officials called that settlement “a slap on the wrist” and, along with the contractors, have urged greater enforcement.

“There are laws on the books right now; the problem is they’re not enforced,” Cooley, of the tri-state carpenters’ council, said.

Efforts on the state level have included a law that took effect in 2010 requiring the Labor, Workforce Development and Revenue departments, along with the Worker’s Compensation Board, to share information on possible worker misclassification in the construction business.

The state also maintains an email address to receive tips, wagehour@dol.in.gov.

But further efforts to bolster enforcement have met with resistance, according to the state senator behind a bill proposed in the last session.

“We’ve got all these different departments, and they’re supposed to share this information, but it doesn’t always happen,” said Sen. Karen Tallian, D-Ogden Dunes.

Tallian authored a law that would have created a Payroll Fraud Task Force made up of representatives of the four state agencies. The law would have required hiring an investigator dedicated to investigation and enforcement. The bill had one committee hearing but never received a vote.

“We recognize there’s a problem. We just don’t know how big the problem is, and we don’t know for sure how to fix it,” said the Pensions and Labor Committee chairman, Crawfordsville Republican Phil Boots, when he concluded the Feb. 1 committee hearing on it.

Tallian said the state government has downplayed the problem and the state agencies’ potential to address it.

“It keeps getting worse,” Tallian said. “This bill will be filed again. We’re going to keep pushing it.”

Ludlow contractor fined for not paying employees prevailing wage

By Kristen LinnartzPublished: July 13, 2016, 12:38 pm  Updated: July 13, 2016, 1:48 pm

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LUDLOW, Mass. (WWLP) – Attorney General Maura Healey announced on Tuesday that a Ludlow contractor has agreed to pay more than $27,000 in restitution and penalties for violating the Massachusetts prevailing wage law.

SSR Construction, Inc. and its owner Peter Slivka accepted two civil citations and agreed to pay $27,387.20 in restitution and penalties to resolve allegations that they were not paying their workers the required prevailing wage rate and failed to submit true and accurate certified payroll records to the awarding authority on a weekly basis.

“Contractors working on public projects must pay their workers a fair wage,” said Attorney General Healey. “The prevailing wage law protects workers and we will continue to enforce the law and hold accountable companies who fail to adequately compensate their workers.”

The Attorney General’s Fair Labor Division started investigating Slivka and SSR Construction in January of 2014 after receiving a complaint that they were not paying their workers the required prevailing wage rate. During their investigation, they found that between September 4, 2013 and December 6, 2013 SSR Construction performed work on a project to renovate the City Hall in Westfield and failed to pay its workers the correct prevailing wage rate. It also didn’t submit true and accurate certified payroll records to the awarding authority on a weekly basis.

Through the settlement with the Attorney General’s Office, four employees will receive restitution payments.