News from Senator Steve Oroho, Assemblyman Parker Space, and Assemblyman Hal Wirths
Widespread Abuse Allows Unscrupulous Actors to Illegally Profit on the Backs of Workers and Taxpayers
Today, Senator Steve Oroho and Assemblymen Parker Space and Hal Wirths (all R-Sussex, Warren, Morris) joined in the call to have all relevant branches of state government step forward and stop the rampant and widespread illegal abuse of workers in the construction industry. Reports from around the State show that there are unscrupulous developers breaking Federal and State laws by misclassifying full-time workers as contractors, committing wage theft by paying below minimum wage, establishing illegal work weeks, paying cash, and evading taxes – all to increase profits.
In addition to these corporations stealing from working people, they are robbing the state of tax revenue and creating an unequal business environment where illegality is the optimal business model.
Senator Oroho and Assemblymen Space and Wirths today called on the Department of Labor and Workforce Development (DOLWD), the Attorney General’s Office, the Department of the Treasury, and the Task Force on Misclassification to step up by ending what amounts to direct corporate welfare, with working men and women being abused and the taxpayers being cheated. In addition, they called upon legislative leadership to post their bipartisan legislation to crack down on this fraud.
“Companies which employ fraudulent work practices shouldn’t be allowed to profit, especially with public dollars,” said Oroho. “When we hear talk of a ‘stronger and fairer economy’ we should be doing all we can to close loopholes to prevent bad actors from abusing the system to the detriment of workers, taxpayers and the State treasury.”
New laws have been enacted such as the issuance of Stop Work Orders on construction projects, but the abuse of construction workers and of the system still continue.
“Some progress has been made on this front,” said Space, a member of the Assembly Labor Committee. “A few years ago, Steve and I wrote a new law with Hal while he was Labor Commissioner to give the DOLWD the authority to obtain proof of, and question, a worker’s identity in order to determine whether the worker is accurately included or reported in an employer’s wage records if an investigation is underway. It is a useful tool, but much more needs to be done to catch the bad actors that are currently defrauding their workers as well as taxpayers in the State.”
Assemblyman Wirths, who served as State Labor Commissioner, has a unique perspective on this issue as he saw it from the enforcement side before becoming a legislator.
“We must be diligent and we must level the playing field for law-abiding New Jersey workers and employers,” said Wirths, a member of the Assembly Labor Committee. “It is not fair to those construction contractors who do the right thing by obeying New Jersey and federal labor and tax laws. It is not fair to their employees who are shut out of work because they expect an honest day’s pay for and honest day’s work.”
The impacts of developer fraud are sweeping: a study from the William J. Hughes Center at Stockton University revealed approximately 35,000 workers are off-the-books or illegally misclassified as independent contractors, while the state is losing $25 million a year in tax revenue due to the vast fraud.
Enforcing existing laws would help create basic fairness and economic justice, with a level playing field so businesses operating within the law can compete and for all workers to be treated fairly and afforded the protections already granted to them in existing law.
Senator Oroho and Assemblymen Space and Wirths are prime sponsors of two separate pieces of legislation that would go after fraudulent actors in the construction industry:
S2469/A3745 Prohibits person from contracting for public work if person is barred from receiving federal contract.
S3954/A5566 Establishes Office of Labor Law Enforcement.
S2469 has already passed the Senate. Both proposals have bipartisan support.
“These two proposals will help meaningfully address fraud and criminality in the construction industry in New Jersey,” said Oroho. “Parker, Hal, and I will continue to work on a bipartisan basis with our colleagues in the Legislature to establish a truly level playing field for all workers where competition is equitable.”