Under the Dome

Legislators to consider toughening bill on companies that cheat on labor, tax issues

In the next two weeks, a small group of legislators will consider putting more teeth in a bill aimed at fighting illegal labor practices in North Carolina.

House Judiciary Committee leaders on Tuesday charged five members with examining three elements of the employee fair classification bill.

Rep. Rick Glazier, a Fayetteville Democrat, said he wanted to restore a provision that allowed state investigators to issue “stop work” orders against companies operating without proper workers’ compensation insurance. He also wanted the bill to include protection for workers who blow the whistle on their employers’ illegal labor practices.

The legislation is in response to a five-part series published last September in The News & Observer and Charlotte Observer. The report examined how employers are illegally treating workers who should be employees as independent contractors.

The practice undercuts law-abiding employers, deprives vulnerable workers of proper insurance in case they are hurt on the job or laid off and costs state and federal government hundreds of millions in tax money each year from North Carolina construction companies alone, the series showed.

Several members of the committee expressed discontent with a provision added to the bill that specified owner-operators of transportation firms should be considered independent contractors. That section of the bill would have spared some companies – including package delivery giant FedEx – from litigating worker status in North Carolina as they have in other states. FedEx has argued in other states’ courts that their delivery drivers are contractors, not employees.

Bill sponsor Dan Bishop, a Charlotte Republican, said he didn’t want the new unit of special misclassification investigators to be monopolized by one issue at one firm. He wanted the team of five to focus their efforts on the small business owners running roughshod within industries such as construction.

Several committee members bristled at the special carve-out, saying it undermined the bill’s intention of leveling the playing field in North Carolina. The subcommittee is expected to examine the FedEx provision as well.

House Judiciary Committee members will return to the bill in two weeks.

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