McCrory orders new effort to crack down on cheating businesses

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Gov. Pat McCrory of North Carolina signed an executive order directing state officials to find and penalize employers committing payroll fraud. The EO comes after a News & Observer series detailed the rampant problem and the failure of the legislature to pass anti-payroll fraud bills. Payroll fraud costs North Carolina and the federal government $467 million a year in lost revenue.

“When unethical employers improperly classify their employees as independent contractors, they not only put our state’s workforce at risk, but also put ethical businesses at a competitive disadvantage and rob taxpayers of significant revenues,” McCrory said.

Photo credit: The News & Observer
Source: The News & Observer

Carpenters donate over 100 toys to Toys for Tots

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In an ongoing effort to give back to the community, Local 1005 of the Indiana/Kentucky/Ohio Regional Council of Carpenters (IKORCC) collected and donated toys to the U.S. Marine Corps Reserve Toys for Tots program this past holiday season.

The Toys for Tots Program collects new, unwrapped toys for children each year. Local businesses serve as collection sites where community members can drop off toys, and the collected toys are distributed to less fortunate children within the community so they can experience the joy of Christmas.

Working with Reggie Hess, Marine Corps League District 1 Vice Commandant, Local 1005 collected over 100 toys and gift cards. “We are so appreciative of the support from Local 1005. We had a very successful holiday season, and it could not have been done without their generosity,” commented Hess. “This past year, we provided over 2,400 Christmas presents to children in Porter County, and in some cases, we were able to give out up to five toys per child. It’s because of generous people like those in Local 1005 that we are able to bring happiness to kids and families on Christmas day.”

Throughout the year, IKORCC members volunteer in their local communities in countless ways, including collecting donations for local charities. “It’s all about giving back to the community and to those who may be going through a tough time,” commented Eric Yuhasz, Local 1005 Secretary and IKORCC Representative. “We have so many members who willingly volunteer time, talents and donations without hesitation. There really isn’t a better feeling than witnessing the joy and graciousness of the families receiving our volunteer services.”

Class representative addresses crowd at graduation banquet

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Jerome Stanford completed the apprenticeship program with hundreds of others from Indiana and Kentucky and were honored with a completion ceremony in December 2015. As the selected speaker to represent the graudation class, Jerome addressed the members and guests that night.

2015 Indiana/Kentucky/Ohio Regional Council of Carpenters Graduation featured speaker, Jerome Stanford – Indianapolis from IKORCC on Vimeo.

Why should politics matter to you?

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American workers have felt a slow decline in their wages since the early 1980s, meaning wage increases have been slightly lower than the cost of living increase. This means less money for groceries, clothing, your children and the everyday essential you may need for raising a family or saving for retirement.

Union wages for the construction industry are no different, except unions have contracts that include wage increase, healthcare and retirement plans. With ongoing training programs for apprentices and journeymen this allows the workers to be more skilled than the nonunion workers. Productivity levels are higher, accidents are lower, and attitudes on job sites are more positive than ever before because of the investments in training by the members and their union. These union contracts are agreements between Labor and Contractors. The more highly skilled workers usually result in better wages, better working conditions and better benefits for their family.

On the other hand, payroll fraud is spreading rampant through the construction industry. This is where unscrupulous nonunion contractors choose to hire hourly workers and pay them cash or as independent contractors (1099s) by not withholding the employee’s state or federal tax deductions, FICA withholdings and Medicare deductions, leaving this responsibility on the workers to pay.

Learn more about payroll fraud

Who are my legislators in Kentucky?

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The Kentucky Legislative Research Commision provides a map to reveal the elected officials in your area. You can use the search by address at the top or select your location. By clicking on his/her bio page, you can find contact information including phone, email and mailing adress. We encourage everyone to reach out to your elected officials regarding issues of concern.

Fun Fact Friday

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Prevailing Wage Controls Costs

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A study of 3 states – including Kentucky – found no meaningful cost difference on school construction comparing states with and without prevailing wage.*

Why do the costs not go up with prevailing wage?

  • Labor only makes up 21% of total building construction costs in Kentucky. Reducing wages doesn’t produce any savings without paying workers illegally below minimum wage. However, productivity does drive the cost of construction. Skilled workers on prevailing wage jobs are 15% more productive than less-skilled workers.
  • Kentucky taxpayers get better project quality and self-sustaining jobs at no additional cost to the taxpayer. Lowering local standards for construction wages attracts a lower skilled, out-of-area workforce which results in large productivity losses, costly errors on the construction project, inefficient use of expensive materials and fewer jobs for Kentuckians.

*Kentucky’s Prevailing Wage Law, Phillips, P., 2014.

Prevailing Wages Protect the Integrity of Projects With no Increase to the Taxpayer

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Source: BuildingStrongCommunities

Prevailing wage protects communities from unnecessary costs over the lifetime of a project. Research shows that lowering local standards for construction wages tends to attract a lower skilled, out-of-area workforce which results in large productivity losses on the construction project. These workers require more supervision and their work often needs additional review and repair before it can be deemed safe and secure.

Communities also may lose revenue through lower tax income that’s a result of local worker wages, which will also force taxpayers to subsidize the social services costs for low-wage workers eligible for government assistance.

Creating Good Jobs

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Projects paying the prevailing wage create local jobs because they are more likely to employ local residents. States that maintain prevailing wages ensure that local contractors and local residents can compete for the work their hard-earned tax dollars fund.  Local contractors bid on quality and productivity and out-of-state contractors don’t bring in a low-wage workforce that take jobs from local construction workers.

Common construction wage projects also directly support local training programs. These programs give local residents an entry point into a career in the building trades, and the people who benefit the most often come from communities surrounding prevailing wage projects. Others who benefit are our veterans, many returning from active duty in Iraq and Afghanistan. Through the Helmets to Hardhats program, these men and women receive the necessary training to successfully re-enter the civilian workforce. They learn skills that pay a wage such that they can support themselves and their family after serving their country. As government money for the Helmets to Hardhats continues to become less reliable, it’s more important than ever to maintain common construction wage jobs that support these programs.

Training programs also offer opportunities to young people, especially those unable or uninterested in pursuing a college degree. These training programs are open to anyone willing to learn a skilled trade and work hard. On-the-job training prepares them for a productive career, one that allows them to learn while they earn. The training programs also team with colleges to offer college credits for apprenticeship training. Once they graduate, these young people work to receive a wage adequate for supporting a family and contributing to their home community.

Prevailing wage is directly linked to job creation by generating jobs for local construction professionals, giving people an opportunity to learn a skill, earn a living, and support a community.

“My job for the Marines is construction, and the Helmets to Hardhats programs give me the opportunity to advance my skills doing work I can be proud of for the citizens I serve.  The common construction wage supports training programs which have helped me find work and make a good living.”

Tj Trinosky, Marine Reservist and Helmets to Hardhats 3rd Year Apprentice
Source: BuildingStrongCommunities

Driving Economic Development

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“The common construction wage provides good paying jobs in my district of the state. In turn, money spent by workers earning the common construction wage generates sales revenue locally and provides sales tax to the state’s general fund.” Indiana State Representative Lloyd Arnold, D74

Source: BuildingStrongCommunities

The benefits of paying prevailing wage extend far beyond workers’ paychecks. Those paychecks set in motion an economic ripple effect that quickly lifts the bottom lines of local businesses, shops and service providers. When working families have money to spend, they do so at local restaurants, shopping malls, and grocery stores– spurring additional job creation that keeps communities and businesses strong. In fact, studies show that every dollar spent on a prevailing wage project generates $1.50 in economic activity in the community.

Businesses looking to establish themselves in new cities look for this type of environment where a solid community and workforce will help their business grow. Contractors who pay workers as little as possible on public projects create high turnover in a workforce that has little or no consumer spending power to support local businesses. Businesses do not move into areas where low wages are the predominant means of income.

The concept of paying minimal or subsistence wages to save money is an illusion created by D.C. lobbyists interested only in increasing profits for their big business clients, and hurts our communities in the long run. With labor costs typically amounting to about 23 percent of public works construction project costs, a wage decrease of 10 percent would only affect overall project costs by 2.2 percent. That marginal savings evaporates long before a project is completed in errors and missing deadlines. Lower wages means lower-skilled workers, so projects go over time and over budget.

As for the city and local government, they are often left with substandard quality roads, bridges, and buildings that just don’t last. Taxpayers must pay for ongoing maintenance and repairs. Many of the low-wage workers are pushed into relying on government subsidies for healthcare, housing and other social services — all at taxpayer expense.