- Associated Press - Friday, September 12, 2014

RALEIGH, N.C. (AP) - State leaders in North Carolina are promising to make changes to prevent contractors from using a labor scheme that can hurt workers and cheat the state and federal government out of revenue.

Gov. Pat McCrory said Thursday he will push legislation to penalize companies that knowingly and improperly classify workers as independent contractors to get a competitive advantage.

“It isn’t fair to the workers. It isn’t fair to those employers following the law. It’s not fair to the taxpayers,” McCrory said in an interview.

The News & Observer of Raleigh, the Charlotte Observer and six other McClatchy newspapers have published a five-part series of stories outlining the extent of the misclassification of workers in the construction industry in North Carolina and elsewhere.

Businesses that followed the law were often shut out of jobs because they could not compete with companies who cut 20 percent or more from their labor costs by treating workers as independent contractors. The advantage comes because those companies don’t pay unemployment or payroll taxes and do not withhold taxes from workers’ paychecks. Many of them do not provide workers’ compensation coverage.

Attorney General Roy Cooper said lawyers in his office will help revenue and housing officials determine what can be done about companies that appear to have misclassified their workers on government projects.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide