Red flag over wages and definitions

Are they contractors, or are they employees? The question is far from academic, as recent arrests in Florida make abundantly clear.

The case, reported here by the Florida Sun Sentinel, involves a Deerfield Beach, Florida-based general contracting firm that stands accused of a scheme to reduce its employee count and costs by setting up shell companies. Six men were arrested. The firm, Richard and Rice, denies any wrongdoing, according to the report.

Regardless of the outcome of that specific case, the situation in Florida can be seen as a wake-up call, even to those operating legally in the realm of builder services. It's also an area that touches on legislation, and the role of the industry to effectively communicate to lawmakers.

Speaking at a recent industry event, US LBM Holdings CEO L.T. Gibson, in response to a question about legislative priorities, explained that rules governing sub-contractors and the reporting of wages affect a lot of lumberyards. "I think a lot of our framers and a lot of our companies that use labor are concerned about those things as well."

The Sun Sentinel reported that Florida authorities believe cases of contractor-related fraud in the constrict ion industry is most prevalent in South Florida, Tampa and Orlando.  

However, a representative for Richard and Rice told the newspaper: "I think this is one where we're all going to see in the end that the government jumped the gun."