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| Welcome to Construction Business Group's Industry Updates. This monthly e-newsletter will help us communicate the important initiatives that we have underway and relevant updates on issues that impact Wisconsin's construction industry. |
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Message from Executive Director
Robb Kahl
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As you all know, payroll fraud is an illegal business model that is slowly eroding the construction industry in Wisconsin. Employers misclassify employees as independent contractors or pay employees cash off the books, which means they are not paying payroll tax, unemployment insurance tax or workers' compensation premiums. This illegal practice cheats all taxpayers, gives the unscrupulous contractors a 30% competitive advantage over law abiding contractors when bidding on work, and leaves employees without proper legal protections.
A study by the State of Wisconsin Department of Workforce Development (DWD) concluded that 44% of all employees audited were misclassified. In just over three years, the DWD conducted 1,963 investigations, with 422 resulting in audits finding 5,841 workers misclassified and $70 million in under-reported wages. The DWD assessed approximately $1.8 million in taxes, interest, and penalties.
On Monday, April 15, Governor Evers signed Executive Order #20 that aims to streamline enforcement of payroll fraud and protect the taxpayers of Wisconsin. The Executive Order creates the Joint Enforcement Task Force on Worker Misclassification. The Task Force will be comprised of representatives from the DWD, Department of Justice, Office of Commissioner of Insurance, Department of Revenue, labor and the business community.
The Task Force is not merely a study and report group, although updating payroll fraud data and reporting to the Governor will be done. Among other tasks, the group is directed to: 1) pool, target and focus enforcement efforts of the DWD, DOR and OCI; 2) identify violators and facilitate the filings of complaints; 3) coordinate enforcement efforts with neighboring states and federal agencies; 4) protect the workers who are being exploited by the employers that misclassify.
Payroll fraud is not a union versus non-union issue. Payroll fraud is being committed by non-union contractors and union contractors. It is being committed in residential construction, commercial construction, vertical construction, road construction, fiber optic construction, and every other type of construction. It is tax fraud on a massive scale and it plagues our local, state and federal economies.
A poll recently released found that nearly 70% of Wisconsinites want payroll fraud stopped and understand that the practice leads to an increased burden on taxpayers. Governor Evers Executive Order #20 is a huge step towards reversing a problem that has grown exponentially in the last decade.
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Building Wisconsin Together
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Another 400 students visit the Coloma Training Center
The Operating Engineers' Training Center in Coloma hosted 400 attendees from 57 school districts on April 3rd. Of the 57 school districts represented, 19 were new contacts for our outreach efforts. We appreciate every contractor and operator that is helping spread the word about this event and the online pre-apprenticeship program.
Thank you to the contractors that joined us for the employer panel: Cullen, Findorff, Intercon, Michels, TDS Telecom and Walbec Group. The insight they provide to students is priceless.
"I just wanted to reach out and say what an amazing experience the day was! As a professional working with kids/teens for the past 20 years I have taken groups on several career field trips. This was, by far, the best one I have had the pleasure to attend. The day was organized, educational, and fun. The numerous adults throughout the building/day were all great. They took time to connect with the teens, shared their personal stories, and were excited and committed to the day, and to the teens! I appreciated that they brought so much energy to the event. Our teens walked away having learned so much! They spoke highly of the day to other Club members, and enjoyed building their dream lives with the earning potential they learned about throughout the day. It was great to see their eyes so full of enthusiasm. I look forward to bringing more teens to future Externship Days. Thank you for all that you did to make the day a success!"
The next Externship Day is scheduled for Wednesday, November 13th during National Apprenticeship Week. Watch for more details.
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Industry News and Updates
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AGC Industry Advancement Program Sponsors Mark Breslin
REGISTER SOON...SPACE IS FILLING UP!!
The AGC Industry Advancement Program Board of Directors is pleased to bring this training opportunity to Wisconsin.
AGC Signatory Members, AGC IAP Contributors and other Signatory Contractors are encouraged and invited to attend "
The Five Minute Foreman" program presented by Mark Breslin. Breslin is noted as the number one speaker in the nation on construction leadership strategy and labor-management relations.
There are two optional program locations:
1) Wednesday, June 5, 2019; Noon - 5:00 p.m.
Harley-Davidson of Madison, 6200 Millpond Road
2) Thursday, June 6, 2019; 7 a.m. - Noon
Liberty Hall, 800 Eisenhower Drive, Kimberly
AGC Members & AGC IAP Contributors: No charge
All others: $200 per person
Who should attend? Company Executives, Superintendents, Foremen, Future Leaders, High potential apprentices
Click
here
for the registration flyer, and more
details.
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Frostman column: Rewarding Wisconsin workers
April 2, 2019
Being a relative newcomer to politics and government, I'm astonished at how often the word "agenda" is thrown around. Listening to soundbites and reading headlines, apparently, everybody has one and they're something to be afraid of.
From a professional communication standpoint, I just hope everyone's agenda is neatly formatted with bulletpoints and is less than a page.
Having sifted and winnowed through what's true from what's false when it comes to bluster and hot air, I've come to interpret "agenda" as meaning a collection of values or a set of proposals that reflect, or when put into action would manifest, those values.
The values reflected by Gov. Evers' 2019-21 budget proposals include equal opportunity, strategic investment and ensuring that all participants in Wisconsin's workforce and economy have a fair shot at sustained economic well-being.
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Contractors, Your Subcontractors' Wage And Hour Practices Are Your Business
J.D. Supra
March 20, 2019
A prime or general contractor may be held jointly and severally liable for any violations, including wage and hour violations, by its subcontractors if the contractor is found to be a joint employer with the subcontractor under applicable federal or state law. As most contractors who work on construction projects covered by the federal Davis-Bacon Act (DBA) (direct contracts) and DBA Related Acts (federal funding or loan guarantees) (together, DBRAs) know, a prime or higher tier contractor is jointly and severally liable for violations by its subcontractors without the requirement of a joint employer finding. Many state prevailing wage laws (which require that wages for construction workers on public works projects be paid according to published wage scales) mirror the DBRAs' liability law. The consequences for violations of the DBRAs, which are enforced by the U.S. Department of Labor (DOL), include back pay, penalties under the Contract Work Hours Safety Standards Act (CWHSSA) for overtime violations, and debarment from holding or working on any government contracts (after a referral and hearing process) for a period of up to three years.
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Illinois lawmakers move to make general contractors responsible for lost wages of others on the job
By Cole Lauterbach
Illinois News Network
Mar 21, 2019
General contractors in Illinois may be on the hook for the wages of their subcontractors' unpaid employees if state lawmakers successfully pass a law requiring just that.
Under state Rep. Jennifer Gong-Gershowitz' legislation, a contractor who hires others to do a job could be forced by the Illinois Department of Labor to be responsible for unpaid wages to workers that the subcontractor failed to pay.
"House Bill 2838 provides for primary contractor responsibility for wage and benefit theft in the construction industry to stop worker exploitation and bring tax dollars back to the state currently being lost by lawbreakers," she said.
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UBC: $2.6B in taxes lost yearly to under-the-table pay
By: Kim Slowey
Published: March 19, 2019
The United Brotherhood of Carpenters (UBC) has levied a serious charge against the U.S. construction industry - that it is shorting the American taxpayer to the tune of up to $2.6 billion each year by making under-the-table payments to more than a million workers. In Texas alone, the losses reportedly top $1 billion.
Prevailing wage proponents and research group Smart Cities Prevail provided the estimates to the UBC.
The UBC adds to that figure about 300,000 independent contractors that the organization maintains are really misclassified employees, forced to work as independents so that employers don't have to pay them benefits, cover them with workers' compensation insurance or make federal and state tax payments on their behalf.
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Fed watchdog wants DOD to have better insight into contractors' safety records
By: Kim Slowey
Published: March 21, 2019
Dive Brief:
- The U.S. Government Accountability Office, a congressional "watchdog," has issued recommendations to the U.S. Department of Labor's OSHA and the Department of Defense aimed at helping them better track defense contractor safety violations. GAO was tasked with reviewing safety and health records of contractors and how they were handled by DOD, the largest contracting agency in the government, with $320 billion in contracts in 2017.
- The GAO report noted that OSHA's inspection data does not include a corporate identification number, which means "website users will likely have difficulty obtaining accurate information on individual companies' previous violations," such as whether the violations occurred on defense projects. DOD also may be missing opportunities to consider a company's safety performance when awarding contracts, it continued, because only a few parts of the agency rate contractors in this category.
(Read More)
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Evers would eliminate 'swap' mandate for federal transportation money
By: Nate Beck
March 8, 2019
Governor Tony Evers' proposed budget would undo a bill passed during the Legislature's lame-duck session that would concentrate federal money into fewer highway projects to curtail prevailing-wage requirements and other federal regulations.
The provision tucked into Evers' biennial budget request would waive a requirement passed during the Legislature's December extraordinary session calling for federal money to make up 70 percent of the funding of large highway projects, or highway rehabilitation jobs worth less than $10 million. Packing federal money into fewer projects has long been a goal for some GOP lawmakers, who argue that doing that will save money by decreasing the number of projects that fall under federal Davis Bacon prevailing-wage requirements and other rules.
(Read More)
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Construction Business Group | 608-240-4170 | www.cbgwi.com
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