The construction industry should be aware already that the state and federal legislatures, as well as several agencies, have focused (unwanted) attention its way. The recent wave of immigration reform has targeted construction, especially. And, because the construction industry is generally considered to have a high rate of misclassified employees working as independent contractors, it has been singled out in a new piece of legislation that has been sweeping silently through state legislatures. We’ve written here before about these proposed laws: Pennsylvania House Passes Construction Industry Independent Contractor Act, as well as Construction-Industry Employers Face Criminal Penalties and Increased Fines Under Proposed Law.
Bill Bowser and I spoke yesterday about Construction-Industry Employers Should Be Aware of Proposed Legislation at a seminar for the Delaware Contractors Association. It was clear from the discussion that the Delaware bill proposes a serious risk for employers in the construction industry and beyond. The Department of Labor reports that the top 4 industries for misclassification are (1) landscaping; (2) nail salons; (3) dental assistants; and (4) construction. It’s likely that the law, if passed, and especially if it starts to generate the revenues advocates claim it will, that similar laws will be passed for other industries, or state-wide generally.
With potentially criminal penalties and extraordinary fines, this piece of legislation would have a major impact on employers in the construction industry with widespread effects across the other industries, as well.
Dan Schwartz, at the Connecticut Employment Law Blog reported that his State is facing a similar proposal. Obviously, this is a catchy idea. Or, more likely, it has some organized supporters who have been lobbying quietly for such a bill.