Citing ineffective and inefficient enforcement, the governor’s office recently launched a task force that will bring together state agencies and industry representatives to prevent labor law abuses.
On June 5, Gov. John Hickenlooper issued an executive order to create the Joint Enforcement Task Force on Payroll Fraud and Employee Misclassification in the Construction Industry. The order establishes the task force until at least Nov. 30, 2020.
“Law-abiding companies and workers are being undercut by those who skirt the law in Colorado,” Hickenlooper said in a statement. “This task force will bring all parties together to find the right solutions to root out any illegal labor activity in our state.”
The order called the construction industry a “critical and dynamic component of Colorado’s economic well-being, accounting for more than 163,600 payroll jobs in 2017.”
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However, the Colorado Department of Labor and Employment has received reports of employees incorrectly classified as independent contractors and other violations at various construction sites around the state, the order stated. “Such labor law violations disadvantage both law-abiding construction contractors and construction workers in Colorado.”
Dividing enforcement duties between various divisions and agencies has resulted in less effective and efficient oversight, according to the order. One of the primary responsibilities of the task force will be to recommend ways to strengthen coordination, communication, enforcement and monitoring.
The task force will assess current enforcement policies to find ways to improve the investigation and enforcement of misclassifications. It will also focus on prevention by educating employees and employers on the legal differences between an employee and an independent contractor, and increasing public awareness about the impact of intentional misclassification and fraud.
In addition to a representative from the governor’s office, the seven-person task force will include members from the Colorado Department of Labor and Employment, the Department of Revenue, the Department of Regulatory Agencies and the Department of Personnel and Administration. Industry representatives will include the Southwest Regional Council of Carpenters and the Associated General Contractors of Colorado.
“Payroll fraud in the construction industry hurts workers and honest businesses,” Randy Thornhill, executive secretary-treasurer for the Southwest Regional Council of Carpenters, said in a statement. “The first step in tackling this issue is evaluating current enforcement practices. With this executive order, the governor’s commitment to building a better economy is clear. His leadership on these issues will lead to a cleaner industry and safer workplaces.”
The task force is expected to provide an annual report outlining its findings and the impact and reach of labor law violations, including wages, taxes and penalties collected as a result of the increased scrutiny. The deadline for the first report is Nov. 30.
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