NH sees problem with 'independent contractors'
The task force reports of 2011 and 2012 made broad recommendations, but did not propose specific legislation. The task force meets again on Monday, with an eye toward its September 2013 report. That report is likely to propose specific language for legislation that would have to be approved by the nine commissioners on the task force.
Intense lobbying likely
The stakes are high, and the issue is likely to attract intense lobbying from business and labor interests should any of the task force proposals find their way into the legislative calendar.
The debarment list is more controversial, although Deborah Stone, who represents the insurance commissioner on the task force, says the state already has one. "Business entities or state contractors can get onto it by violating certain aspects of labor law," she said, "but I don't think there is currently anyone on it."
"Something like a stop-work order or coordinated sanctions are extremely effective tools," she said. "They are not tools that anyone wants to actually use to keep a business from operating. We want businesses to be operating in New Hampshire, but we want them to be operating in the right way. If we found there was misclassification going on at a job site, and we can say, 'If you don't fix this you're going to lose your liquor license,' you'd be amazed how they would respond."
A U.S. Department of Labor study in 2000 found that as many as 30 percent of businesses misclassified employees as independent contractors. A Government Accountability Office (GAO) update in 2009 determined that the number of misclassified workers expanded by 50 percent in the interim.
"Part of the reason this has come to the fore has been the financial and economic struggles the country and state have been going through in the last five years," she said. "Businesses were looking for everything they could do to reduce their costs and stay in business, so many more people were ending up out there as independent contractors."
The problem is particularly severe in the New Hampshire construction trades, according to Mark McKenzie, president of the New Hampshire AFL-CIO.
"If they don't get caught, and many times they don't, there can be a significant savings to the violator," he said. "A carpenter's workers compensation rate is at least $20 per every $100 of payroll. It is a roll of the dice for an employer who may not get caught. Everyone knows this is going on, so we're happy to see the Department of Labor in New Hampshire is really stepping up their game on this.
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