CSG Supports Legislative Review of Worker/Owner Business Model

Online, October 6, 2010 (Newswire.com) - Utah's state legislators have always been open to and welcoming of innovative, unique and entrepreneurial business models and solutions to business problems, including business improvements in the construction industry.

However, any new and inventive business model must comply with both the letter and the spirit of state laws and regulations, especially as they relate to fair treatment of workers and labor law compliance. Therefore, it is entirely appropriate that a legislative committee and work group is reviewing the timely issue of the worker-owned business model in the construction industry. Key lawmakers plan to introduce legislation in the upcoming January legislative session to address these issues.

In the construction industry, the worker/owner business model operates somewhat like a worker cooperative. A business entity providing labor services is co-owned by all the tradesmen and women who are members. Construction trade firms then contract with the business entity to engage labor for projects. Conducted properly, this business approach provides significant efficiencies and advantages for worker/owners, sub-contractors, general contractors, and the overall construction industry.

For member/owners:
• Build value and equity as an owner
• Share in company profits
• Decide the direction of the company
• Work more consistently and control own destiny
• Safer work environment
• Greater professionalism than going it alone
• Power of the collective group of owners in branding and marketing to win more jobs

For sub-contractors:
• Access to flexible/scalable workforce
• Use workers with incentives as owners to work hard and succeed
• Avoid having to recruit, hire and fire workers
• Avoid overhead hassles related to HR and regulatory issues
• Improved safety programs/compliance
• Bid for projects more competitively
• Outsource labor risks, tax and regulatory compliance

For general contractors:
• Use a workforce that is more productive
• Use a workforce that is safer
• Use a workforce that is more professional
• Scalable workforce means your jobs get done faster

For the general construction industry:
• Improved workforce increases competition, boosts productivity and efficiency, driving up quality and compensation, and expanding the industry

While some worker-owned businesses provide significant benefits and strive to comply with good public policy, others may use this model to exploit workers and evade labor laws and regulations. That's why it makes sense for the Legislature to review these business arrangements. Loopholes should be eliminated so that the construction labor marketplace is a level playing field for all participants and everyone involved complies with both the spirit and letter of labor laws and regulations.

"We support policy and legislation that make sense and protects worker/owners," says Cory Atkinson, Safety Director at CSG. "For example, all CSG worker/owners are covered by Workers Compensation Insurance, are classified properly, are eligible to work in the United States, are OSHA compliant, and all tax withholding and reporting are conducted properly."

State lawmakers will consider legislation that will address these issues, ensuring that worker/owner companies are operating within good public policy and that worker rights are fully protected.