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Hickenlooper creates task force on abuses in construction industry

Author: Marianne Goodland - June 8, 2018 - Updated: June 8, 2018

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Smoke rises over downtown Denver from a fire at an apartment-complex construction site at 1833 Emerson on March 7, 2018. (Mark Harden, Colorado Politics)

Colorado added almost 10,000 jobs in the construction industry between April 2017 and April of this year, but that growth is accompanied by complaints about payroll and employee “misclassification” that Gov. John Hickenlooper says can lead to labor-law violations.

This week, he signed an executive order setting up an enforcement task force that will coordinate with several state agencies to share information and improve investigation processes around alleged misclassification and tax fraud.

The problem shows up in how some construction companies classify employees and independent contractors. The latter, according to Randy Thornhill of the Southwest Regional Council of Carpenters, allows unscrupulous construction companies to avoid paying fair wages and payroll taxes.

“They use labor brokers to hire inexperienced workers onto dangerous job sites as ‘independent contractors,’ Thornhill said in a statement.

Thornhill said payroll fraud and misclassification cost Colorado workers an estimated $750 million annually, “significantly stunting Colorado’s tax revenue and draining resources for school, public health, and community projects. … Corrupt contractors either intentionally misclassify employees as 1099 subcontractors or, more often, pay them off books.”

Thornhill blamed the problem for the deaths of two construction workers at a North Capitol Hill apartment-complex construction site at 18th Avenue and Emerson Street that burned to the ground in March. The fire and deaths are now under federal investigation, in part based on a claim that the workers were being paid under the table.

“Our union applauds the governor’s strong leadership in tackling this issue,” Thornhill said.

The seven-member task force will include representatives from the governor’s office, the departments of Labor and Employment, Revenue, Regulatory Agencies, and Personnel and Administration. It also will have members representing the carpenters’ union and the Associated Contractors of Colorado.

The task force is expected to submit a report by Nov. 30, and on that same date for the next two years, which will include proposals for regulatory or legislative improvements.

The task force also is charged with reporting on employers who commit labor and payroll violations in the construction industry and to help assist workers claim wages and other payments.

Marianne Goodland

Marianne Goodland