What SB 5565 WA general contractor responsibility legislation means for our industry
Senate Bill 5565 reached the floor of the Senate subcommittee for Labor and Commerce where Council staff joined UBC International staff to urge progress on our bill that will aid in combating wage theft in the construction industry.
WHAT DOES SB 5565 DO?
SB 5565, General Contractor Responsibility, will enable unpaid workers on construction projects to collect wages directly from the general contractor. General contractors have long relied on a level of separation from themselves and a cheating subcontractor. This allows a general contractor to benefit off lower labor costs from hiring subcontractors who either underpay or outright refuse to pay their workers while avoiding any accountability.
These unpaid workers are often forced to navigate a cumbersome state system in an effort to collect owed wages. Workers face long wait times, complicated forms, and confusing processes. This results in weeks, months, and sometimes even years that a worker goes without the pay they worked for. In an economy where many are only 3 months’ pay away from homelessness, SB 5565 ensures these works can collect their pay immediately and without penalty.
FIGHTING FOR WORKER RIGHTS ACROSS THE US
Opponents of the bill tried to argue that wage theft was not an issue in Washington state, or that “they have never seen it.” Senators on the subcommittee insisted that wage theft was such a minimal problem that it shouldn’t even be addressed.
UBC and Council staff who have dedicated their time combatting wage theft tell another tale–stories of the number of employers misclassifying workers rising from 5% to 14.4% since 2008; the state of Washington losing an estimated $152 million in unemployment taxes; and $268 million in workers compensation premiums during the 4 year period of the study.
Council staff relayed real-life examples of cases of subcontractors cheating their workers. One story included a subcontractor crossing state lines to cash checks to pay 45 workers, which they cheated on overtime and breaks. By the time the state opened an investigation, the company had folded and the workers never received compensation. As many had been paid in cash and lacked a proper tax paper trail, they were given no aid by the state and this subcontractor was never brought to justice.
Another included a 2016 story of workers who were cheated out of overtime and breaks. The Bureau of Labor & Industries launched an investigation and found them to be owed $100,000. The subcontractor appealed and fought the ruling. Four years and various court hearings later, the workers were paid only half of what they were owed.
WHAT CAN WE DO TO COMBAT WAGE THEFT IN OUR INDUSTRY?
Wage theft and tax fraud are growing problems throughout the country. Due to the structure of contract work, the construction industry is one of the highest at risk. Across the country, SB 5565 is being fought for by the UBC to protect union and non-union workers alike. Now, Washington state has the opportunity to make a positive move in protecting the workers in the construction industry.
Contact your legislative representative and ask them to protect the people who build our homes and schools. Tell them to support SB 5565.