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Apr
2016
27

Absurd CO Secrecy Law Enables Wage Theft Cover-ups, but this Dem Rep. Has an Answer

Jessie Danielson wage theft

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In Colorado, construction workers are being hired through labor brokers to disguise their employers’ wage theft, and under current law there is no way to view which companies are engaging in this practice.  But a new bill from Rep. Jessie Danielson (D-Wheat Ridge) would make citation and assessment information on wage law violations available for inspection under the Colorado Open Records Act (CORA), blowing the cover off what are now scurrilously classified as “trade secrets.”  

The proposed bill, HB 16-1347, recently passed the House Judiciary Committee by an 11-0 margin.

Under the new law, employers would have 20 days to object to any request for this type of information if they believe the information contains “trade secrets” and should not be applicable to CORA.  The state Division of Labor would then make a determination as to whether or not the information should be released to the public.

The language in the law is the result of talks between the state labor department, labor advocates, and the Colorado Association of Commerce and Industry.  Speaking to regulators about the subject last week, David Kersh, Executive Director of the Los Angeles-based Carpenters/Contractors Cooperation Committee, said:

“You’re talking about a lot of money in taxes that are not being paid.  These contractors are enabling that — millions and millions of dollars are going underground. At the same time, middle class workers and their families are being hurt.

It’s ironic.  All of these construction unions are pro-development. We share an interest with the development community. But this is wrong.”

The scheme was described in a recent piece by the Daily Camera.  By hiring labor brokers as subcontractors, contractors can shield themselves from liability:

Though the fraud takes different forms in different states, in Colorado here’s how it often works, according to wage advocates and regulators.

A subcontractor hires a labor broker as an independent contractor, something that is legal here as long as the labor broker registers as a limited liability company (LLC) with the Colorado Secretary of State. This can be done in a matter of minutes online.

Once the labor broker registers as an LLC, it exempts the subcontractor from any liability for the labor broker’s workers, according to the Colorado Department of Labor.

In documents provided to the Daily Camera, the Denver-based Southwest Regional Council of Carpenters union identified 12 subcontractors in the metro area it believes routinely use labor brokers with LLC certificates to recruit undocumented workers and some two dozen independent labor brokers who bring laborers in from Nebraska, Texas, North Dakota, South Dakota, Nevada and Utah and move them from one construction site to another.

Over the past year, wage complaints to the Colorado Department of Labor and Employment are up 25 percent, partially due to new laws making it easier for low-wage workers to come forward with complaints.  However, many workers who bring forward complaints see little justice.  This past year, the department made only 78 determinations that an employer had violated wage laws.  Over the past two years, the department closed 7,215 wage complaints.

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