For the past five years, the Department of Labor has investigated 16 companies in Utah and Arizona for misclassifying employees as contractors. It came to a close on April 23 with $700,000 owed in back wages, damages and penalties for more than 1,000 construction industry workers in the Southwest, reports AZRE.
This is hardly the end of the DOL’s targeting of the construction industry for illegal labor and wage practices.
Misclassification of employees and contractors is more often than not unintentional, experts say. The easier said than done solution is educating employers and employees.
“We try to educate our members,” says Arizona Builders Alliance Executive Director Mark Minter. “Employment law attorneys come to our conventions … I hope, as a result of those efforts, people are more aware of potential pitfalls.”
Minter says most calls from members seeking advice concern issues of travel time and apprenticeship classifications, not about righting the misclassification of employees. Minter understands the consequences of misclassification, citing a personal friend who lost his business because he improperly reported sales tax and was audited by the Department of Revenue.
