Utah Media Investigate Growing Crime of Worker Misclassification
A growing number of companies across the country are purposely misclassifying workers as self-employed 'owners' for the sake of saving on labor costs. Doing so allows the companies to avoid paying health care, to ignore worker regulations, shift the burden of payroll taxation to the workers and obtain an uncompetitive advantage over businesses who do the right thing. A recent investigative report by Utah's KSL 5 News took a closer look at how the process works:
Thousands of Utah construction workers are employed in dozens of large projects not as traditional laborers, but as “owners” under a workforce re-classification process that critics say could allow employers to avoid paying benefits, payroll taxes and workers compensation insurance, according to an investigation by KSL Television.
The Utah Attorney General’s Office and the Utah Labor Commission told KSL they are each looking into the practice, which contractors say has allowed such companies to under-bid competitors on construction projects by as much as 50 percent. The companies who pursue the practice say it is legal under Utah’s limited liability laws, and isn’t designed to shirk any tax or payroll obligations.
In particular KSL 5 looked at a company called U&I, LLC: