State Senator Lathrop bill aids construction business (mislabels an employee as an independent contr

[Omaha Steve]

Note. I've met the Senator and he is a wonderful friend to the working men & women in Ne.!

http://www.lavistasun.com/site/tab7.cfm?newsid=19408975&BRD=2712&PAG=461&dept_id=557009&rfi=6

By: Jon Burleson
03/20/2008

"Employee misclassification occurs when an employer mislabels an employee as an independent contractor," Lathrop said. "Such a misclassification exempts the employer from certain tax obligations and liability."


Senator Steve Lathrop


Because of these misclassifications, Lathrop said the State of Nebraska has lost millions of dollars in tax revenue.
By not classifying employees correctly, Lathrop said it allows contractors an unfair advantage in bidding projects. With no withholding tax or unemployment insurance payments among other expenses to be paid, Lathrop said contractors can underbid companies that are following the law.

Jim Steele, risk manager of Falewitch Construction Services in Papillion, said some companies are playing against a stacked deck.

"It's like playing cards with someone and they keep winning," Steele said. "Only you notice that they are holding more aces than are supposed to be in a deck."

Steele traveled to Lincoln to testify before state senators. He told lawmakers that misclassification of employees, especially in the construction field, allows an employer to avoid federal and state taxes, safety training costs to meet OSHA requirements, unemployment insurance, workers compensation insurance and general liability insurance.
Also, he added, employees are cheated out of benefits such as health insurance, retirement benefits, paid vacation and disability insurance.

John Falewitch, owner of FCS, said that such companies have undercut his bids on projects by as much as 30 percent. In the last week, Falewitch said he lost four bids by more than 18 percent each to companies he believed used the misclassification advantage. The loss of those bids translated into the loss of more than $1.3 million in contracts, he said.

FULL story at link.