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HB 230 22 June, 2009

Posted by David Anderson in Uncategorized.
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The General Assembly has been sliding toward a disturbing trend this year. It seems to have forgotten the high priority it has set on a pro-business environment which has served us well.

HB 230 is modeled on the Maryland law which cracked down on independent contractor abuse in the state of Maryland. We all know that the industry has some players who pay under the table. The problem is not in anyway limited to construction, but it is believed to be the majority of the problem. There is also a very legitimate use for people that you don’t hire. They are subcontractors and a vital part of industry in construction, technology, and sales. The fastest growing segment of employment outside of government happens to be independent subcontractors. The question is how do you ensure that we have legitimate I. C. use and not under the table payments which do not pay unemployment, social security, and workers’ compensation?

Maryland decided to step up enforcement of the existing law with some success. Apparently, the Speaker of the Delaware House admired it (along with my favorite Rep. Job Killer aka Kowalko). The problem is that the Delaware bill drafted for him goes far beyond the Maryland bill and may harm small businesses and contract labor. If you make a mistake in the Delaware bill, you will be subjected to treble damages. If you do not produce the records that the Department of Labor wants when they want it– even from 3 years ago which may not be stored on site, you could be subjected to a stop work order. If a businessman is in fear of a costly stop work order which could cost him loads of money even if he proves himself innocent, how will that help construction to come back? Will he hire bigger out of state firms or instate union shops to do his subcontracting and not take chances on the little guys who have one or two man operations? Remember the industry just lost as many people in May as are currently employed at the closing GM plant.

The Draconian penalties and the fact that the regulations and appeals process are to be developed later by the Department of Labor, make this bill one of concern to the business community. Today it is the construction industry. Tomorrow it could be sales and technology. If you care about job creation, email your representative and urge them to work with the business community to revise this bill so everyone pays their fair share of taxes, but no one has an unfair burden of regulation.

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