Kaiser

Michael Theriault headshot

The tax plan passed by the Republican Congress and signed by President Trump last month includes a stealth attack on construction unions.

The so-called "independent contractor" is already widespread in non-union construction. An "independent contractor" in construction is generally a worker who does the same tasks as we do, but who is supposedly no one's employee but his own, even if his shoulder is into the same load as another worker's, and even if he is one among dozens working side-by-side on the same job under the same supervision.

California law limits strictly the classification of workers as independent contractors by enumerating criteria that trigger employment status. Under these, very few workers in construction could legally be independent contractors. Any of us who have visited non-union jobsites as organizers know that the law is commonly flouted.

Much of what is essential to unionized construction employment is absent among independent contractors.

There is no apprenticeship system, and indeed the interest of independent contractors is not in training young men and women, because these can only become their competitors.

Our pensions and the well-being of workers who have given much of their lives to our Trades depend not just on investment returns, but on the continuing hourly contributions of current workers. Independent contractors make no such contributions.

As expensive as our healthcare is, it would often be more so if our trust funds could not use the number of participants in our plans as bargaining leverage against the demands of the providers. Independent contractors add nothing to such a number. If an independent contractor has healthcare at all, it is either through a spouse or purchased on the open market. Far likelier the contractor has no healthcare—and certainly no workers' compensation in the event of injury – except by going to an emergency room at the eventual expense of our healthcare plans, as the hospital's costs are passed along.

While we do not eschew competition – any Iron Worker can tell you what happens when two raising gangs start out of the ground at the same time on neighboring buildings – we have an ethic of working collaboratively for our employers. One independent contractor collaborates with another only until some advantage in trashing the collaboration presents itself.

And an independent contractor is on his own in demanding a rate of pay and collecting payment, without the power of collective bargaining and the protection of a contract and a grievance procedure.

Nonetheless our organizers know how hard it can be to convince a worker – and especially a younger worker – that he should consider himself an employee and not a contractor, and that he should join us.

We hear a variety of reasons for not joining us, but they usually come down to a desire for pay up front without deductions. Often this is accomplished through cash payment to the independent contractor, who then avoids taxes altogether.

Republicans have now made it easier to accomplish it without breaking tax law, at least.

The changes made to the tax code in December grant tax advantages in many cases to being a "pass-through entity" instead of an employee. If this does not in fact encourage those non-union workers who are currently law-abiding taxpaying employees to ask to be treated as independent contractors, it will at least make it more palatable to them when their current employers seek to reduce their own payroll tax burden by reclassifying them so. This will in turn make it easier for those employers to underbid union-signatory contractors and to take work away from us.

A 31 December New York Times piece says, "The effect of the deduction could be especially big in industries where misclassification is already rampant." It then proceeds directly to discuss construction.

Our unions, then, will have an increased burden in supporting the understaffed state agencies assigned to police the highly mobile construction workforce for misclassification of employees as contractors. We will need more organizers, and they will have to incur even more frequent risks walking onto non-union jobsites. We will find more tasks for our attorneys and pay more in legal fees. We will do these things, or we will lose market share and the power over wages that comes with it, and we will suffer the diminution of so much that is essential to us.

As chaotic, rushed, and lightly considered as the Republican push to pass the changes in tax code was, I am certain that many Republicans understood these effects on us.

I am not so sure the President did.

Given his history as a developer of stiffing contractors (and so their workers), I expect that even if he did, he would hardly have cared.

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