Leading up to the 2015 Legislative Session, the Texas House Business and Industry Committee held hearings to look at new legislation to crack down on companies and other employers who may deliberately cheat the system by mis-classifying employees as independent contractors.
Scott Braddock, a veteran Texas political journalist, told Breitbart Texas that the dynamics surrounding the issue are changing in favor of the Legislature making big changes.
“Four years ago, there was very little traction for this. But as business leaders began to speak out, lawmakers from both parties last year saw the need to at least pass a targeted crackdown on companies that cheat,” Braddock said. “2015 could be the year they finally get serious about enforcing the law, but only time will tell.”
In an article written for TexasGOPVote.com, Braddock reports, “The ethical contractor can be underbid by a cheater by as much as 35 to 40 percent, depending on market conditions and which industry we’re talking about.” While the construction industry is reportedly one of the worst abusers of this process, testimony before the committee, which went about six hours, was heard from employers in other service related industries as well.
Don Dyer, who operates a janitorial services company in most major cities in Texas, told the committee members, “You cannot do business in Dallas, Texas unless you operate illegally.” He cited the growth of the Texas economy as contributing to the expansion of the number of cheating companies. Dyer pointed out that it is already against the law for companies to misclassify workers however, “because of weak enforcement mechanisms there are virtually no tangible consequences for violating the law.”
“Law abiding companies that classify their employees legally simply can’t match the prices of illegal operators and are slowly being driven out of business because they can’t bid low enough to win contracts,” Dyer said.
TexasGOPVote.com has, for the past several legislative sessions, reported the Legislature’s actions, or lack thereof, and the intricacies of the issues at stake.
Representing the construction industry, Stan Merek of Merek Brothers Construction testified about an industry self-policing initiative that encourages construction companies to sign on to ethical employment hiring and training standards. The program called the Construction Career Collaborative (C3) encourages companies and their subcontractors to adhere to standards such as paying hourly wages, overtime and providing safety and craft related training.
Braddock reported objections from State Representative Dwayne Bohac (R-Houston) who he said was skeptical of making changes away from a voluntary compliance system.
Rep. Paul Workman, R-Austin, sounded frustrated by the efforts of some business groups and others to push back against mandatory workers’ comp for the construction industry. Workman, who is a builder himself, said the industry is particularly dangerous for workers and many times the subcontractors on large jobsites have very few employees for whom they carry no insurance, according to Braddock’s report.
Committee Chairman, Rep. René Oliveira (D-Brownsville) said the Committee hopes to have additional hearings on this matter and those should be completed by the end of May.
Video of the full testimony before the Business and Industry Committee may be viewed online.
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