Dive Brief:
- Alaska's Department of Labor and Workforce Development fined a contractor $280,000 for willful safety violations in connection to a worker who was crushed on one of its job sites, according to the Alaska Dispatch News.
- Officials claim that North Country Services' owner Mark Welty did not follow proper shoring and bracing procedures, which led to a wall collapsing onto 24-year-old Nicholas Tinker during demolition of a staircase that was supporting the wall.
- State officials also said Welty misclassified Tinker and all other workers as independent contractors, and therefore did not pay unemployment insurance, workers' compensation insurance or payroll taxes for them.
Dive Insight:
There are strict rules as to who can be labeled an independent contractor, and employers often try to avoid the increased overhead by skirting the rules. However, if the Internal Revenue Service or any other relevant state agency discovers this, the penalties are huge. Not only could the IRS grab overdue payroll taxes, but the state workers' compensation agency could also levy fines and press criminal charges.
Earlier this week, a Brooklyn contractor was charged with bilking the New York State Insurance Fund — the agency administering state workers' comp laws — out of $64,000 by not reporting about $570,000 of income. He now faces up to 15 years in prison for underreporting revenue and not carrying the required workers' comp insurance.
Back in September, a Texas-based contractor working on a $25 million hotel in Waikiki, HI, was cited for allegedly misclassifying 65 workers as independent contractors and fined $767,095 by the state's Department of Labor and Industrial Relations. Similar to the North Country case, R&R Construction Services reportedly did not pay unemployment insurance, workers' comp premiums or the disability and insurance premiums required on that job.
Demolitions are some of the most dangerous operations in construction. One of the most high-profile, recent demolition accidents was the Philadelphia building collapse in 2013 that killed six people. The case resulted in criminal charges for two contractors as well as financial settlement from the building owner.