The Utah AFL-CIO, various construction companies throughout the state, and multiple state and federa agencies have been fighting against employee misslcassification in Utah since 2010. While the state has banned this practice, it wasn't until recently that these companies have come under investigation. This past year, the U.S. Department of Labor recently reached a $700,000 settlement with 16 construction companies based in Utah and Arizona that were using the abusive practice of employee “misclassification.” This practice included having these companies label their employees as “owner/members” to avoid paying workers’ compensation, payroll taxes, and unemployment insurance, which then gave them significant advantages in the bidding process. In the end, over 1,000 former employees will receive back pay while these companies are being forced to pay fines.
We applaud this settlement and the efforts of the many individuals and agencies involved. While this ruling is recent, this is not a new battle for us in Utah. We were one of the first states to tackle this problem, starting five years ago. In 2010 we began looking into these companies with the help of our labor ally, State Senator Karen Mayne. During this process, we heard stories from former employees who were cheated out of their wages, lost jobs because of injuries, or were denied payment.
As we discovered the number of these companies in Utah, we began meeting with multiple construction companies and contractors, including union and non-union shops, as well as the Construction Coalition, represented by David Spatafore. In a state not necessarily known as worker or union friendly, our coalition of industry members helped pass good legislation protecting workers from employee misclassification. The first round of legislation passed in 2011, and since then, we have been carefully monitoring similar practices, helping eradicate this issue from Utah.
The success of ending employee misclassification in Utah by the efforts of organized labor, construction firms, and many others, shows that passing laws benefitting Utah’s workers are possible. This coalition has been valuable as we have fought for other labor issues in the state, laying a groundwork for communication that has given us access with legislators and other policy makers, and proving that the voice of organized labor is still as strong and relevant as ever in Utah.
A great story, by Fox 13 news, highlights the implications of this case. View it here.