Republican Gov. Pat McCrory is due credit for stepping in where legislators of his own party failed to act. He has moved to protect workers and businesses that play by the rules when it comes to classifying workers as employees or contractors.
The governor has directed the state Industrial Commission to investigate complaints that some companies are illegally classifying those who really are employees as contractors. The distinction makes a difference. Those classified as contractors are denied insurance in case they are hurt or laid off. And businesses that play by the rules have been put at a disadvantage when competing against companies with lower costs that are the product of misclassifying their workers as contractors.
Consider Doug Burton, owner of Whitman’s Masonry Co. in Raleigh. He has his workers properly classified and with insurance, but he’s competing against companies that skirt the rules. Of the McCrory order, he said, “I hope it’s not the end. But if it helps serve the purpose of ridding the state of North Carolina of misclassification, I’m all for it.”
Yes, while McCrory’s order is a warning shot at employers who misclassify their employees as contractors, the order needs the force of law behind it.
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That has been hard to obtain in the General Assembly, where technical fusses have sidetracked legislation in the past. Wake Rep. Gary Pendleton has been focused on the issue and says he will remain so.
An executive order, such as the one issued by the governor, can have an effect. McCrory, for example, would like to see cooperation in cracking down on some employers come from both the state Labor Department and the Insurance Department. Insurance Commissioner Wayne Goodwin has always been pro-worker and pro-consumer and will be inclined to do what he can to help put some teeth in the governor’s order. Cherie Berry, the state labor commissioner, has been anti-labor, ironically enough, throughout her tenure. McCrory is not going to get much help from her here, as Berry has long favored business interests over workers.
The General Assembly has fiddled around on this issue for too long, and perhaps the governor’s order will draw some attention. Meanwhile, making businesses treat workers the right way with proper benefits also has the virtue of helping ethical businesses that simply want a level playing field.
The governor’s eye is clear on this one. He’s right, and the General Assembly should follow his lead.