Construction Industry Robbing the Public

Mr. Deez

Mr. Deez

Beer Prophet
TxStHorn and I have been talking about this for years, and finally a media outlet is catching up with us. Link.

The story focuses on illegal immigrants, but the law wouldn't be any different for a US citizen who was working on the job site. The only reason it is arguably relevant is that illegals are willing to work under these conditions, while most US citizens are not.

What happens is builder wants a construction project but doesn't hire workers. They hire subcontractors. Some of them are reputable businesses that are insured, but huge numbers of them (the inexpensive ones) are not. They're often nothing more than a Mexican dude (who's usually legal and speaks some English) or sometimes a loser white guy who speaks some Spanish with a few hammers and a pick-up truck he can use to drive day laborers (who are usually illegal) to the job sites. They're employees of his. He pays them under the table, provides no benefits, and doesn't even know what workers compensation is.

Safety is lax, and not surprisingly, a guy gets seriously injured, usually by falling or having something or somebody fall on him. He gets rushed to the ER, requires immediate surgery, and walks out with a six-figure hospital bill (not to mention a surgeon's bill, a radiology bill, an anesthesiologist's bill, etc.).

If the subcontractor carries workers compensation insurance, the guy's bills are covered. (The reimbursements to the hospital and doctors might suck pretty badly and take a while, but they will eventually show up.)

However, if the sub doesn't carry workers compensation insurance, the worker's remedy is a lawsuit, to which a hospital could file a lien and get paid. In a perfect world, that's not a problem. These subcontractors don't give two squirts of piss about safety or whether they get hurt, and proving negligence and even gross negligence (opens up punitive damages) on them is usually a cakewalk.

The problem is that they usually don't carry liability insurance or if they do, the policy usually excludes injury claims by employees. They may have a little money of their own, but they can't even come close to covering medical bills in the tens or hundreds of thousands.

That leaves a lawsuit against the general contractor or builder. They are very powerful special interests and have big clout in the Legislature and flat-out own the Governor and the Texas Supreme Court. (Remember, Bob Perry was a home builder.) Accordingly, meeting the very onerous legal standards required to get at them is almost impossible. 99 out of a 100 times, they're going to walk away with no legal fault, even if they look pretty guilty to a layperson. Even if you can overcome the tough legal framework and get the case to court, the fault on the uninsured and insolvent subcontractor is usually so great that the jury puts most of the fault on them, not the general contractor or builder.

So where does that leave the hospital? It can scrounge around and try to get the taxpayer to cover the bill if the worker can somehow make himself eligible for government assistance (like Medicaid or in some counties (including Travis) the Medical Assistance Program). If that can't or doesn't happen, then it's left with writing off a colossal bill.

This is the kind of thing Tea Party types should care about. Lax safety and failing to carry basic insurance is ***-raping the taxpayer for huge money every time this happens, while some crooked business is making a lot of money hiring illegal aliens. However, I rarely hear much outrage from them about it.
 
I have defended a number of employers over the years in cases such as you describe. The aliens will work cheaper and would not think of telling the boss, "no, I wont do it. It is not safe." Next thing you know you have a dead alien.

How many times have you heard of an employer being sent to the federal pen for hiring them? Why do the feds not pursue them? Why do the feds not bust the people the employers send the aliens to for their forged papers? This is the cheap way to discourage these practices.
 
Wait, I thought the hiring of illegal immigrants was a product of Big Business?

Look into Highway construction, for the most part funded by the government and you will get sick to your stomach.

New Construction and Road Construction alone would eliminate the unemployed, if you could get the lazy asses off the couch.
 
I have been working on registering kids for school for next year. Long lines of parents with Mexican IDs and children with US birth certificates. Between D's looking the other way to shift demographics in their favor and R's looking the other way to make a few extra bucks, we have created a big mess.

Even if we were able to deport the illegals or get them to self deport through regulation, we have the issue of their children being US citizens. Are children of Mexican citizens born in the US considered Mexican citizens?
 
yes larry
children born of Mexicans but in USA are also Mexican citizens and IIRC can remain dual citizens

If an Illegal self deports or is deported I can't imagine any parent NOT taking their children with them.
 
You guys are going off on a tangent about illegal immigration, and frankly, that's a diversion. The result would be the same even if the workers were legal. Hospitals and taxpayers would still get screwed.
 
Again, someone mentions that Republicans look the other way for business reasons, ummm NO NO NO............

Get over that fallacy, it is incorrect and you have no evidence other than what you read in the paper 30 years ago.

Big Business cannot hire Illegal Immigrants, have you worked for a big company with a HR department?
 
Subcontractors dont have hr departments and will hire anybody that is cheap. The subcontractor is then hired by big businesses for much cheaper than would be the case if they were paying above the table, hired legal employees, and were properly insured.
 
The big fish know the rules and how to play the game. Its all about plausible deniability. From a law firm's website:

AVOIDING CO-EMPLOYMENT ISSUES WITH SUBCONTRACTORS

General contractors should avoid creating a co-employment relationship with a subcontractor, because this may cause the general contractor to be held liable for the subcontractor's failure to comply with federal immigration and other employment laws. To avoid co-employment issues with a subcontractor, general contractors should do the following:
1.Don't retain too much control: Generally, a contractor is not liable for the actions of its subcontractor, except when a contractor retains control over the subcontractor. In situations where the general contractor retains control over the subcontractor's work, one must be careful to not create an employer-employee relationship or co-employer relationship, in place of the contractor-subcontractor relationship.

2.Don't review subcontractor's I-9 forms. Every employer is responsible for completing I-9 forms for its own employees. General contractors are not responsible for ensuring that its subcontractor's I-9 forms are complete. However, all contractor agreements should include a provision requiring that its subcontractors properly complete I-9 forms for all employees.

3.Don't use a subcontractor with a questionable reputation: Contractors must be prudent when selecting subcontractors. Don't select subcontractors whom you suspect employ illegal immigrants.

4.Don't continue to use a subcontractor if you know the contractor employs illegal immigrants: Under IRCA, a contractor who knows its subcontractor is employing illegal immigrants will be treated the same as a contractor who actually employed unauthorized workers itself.


You are not screwed for using a subcontractor that hires illegals unless you knew about it. So, make sure you dont know about it and you are good.

link
 
Right Major, Nothing to see here. Sure a big company gets a lucrative contract, worker gets hurt (hired by a subcontractor to the big company) and nobody is there to pick up the tab. Nothing to see here. Just keep moving on. Oh and by the way, can you send another contribution to "Texans against Lawsuit Abuse" so nobody anywhere has to pick up liabity except the bleedin heart libs that don't mind paying taxes and care are about poor folks that should have known better than to get hurt in the first place.
 
Larry,

The information on that website is exactly right, and your description of "plausible deniability" is right on the money. The key to avoiding responsibility for illegals working on your job sites or for workers (legal or illegal) getting injured on your job sites is to play dumb and avoid the appearance of control or authority over the details of the work done.

Of course, anybody with a brain knows it's a colossal load of ********. Do you think some big home builder who's developing a new subdivision is going to give a crew of hungover Mexicans real control over how the work is done on a job site? Hell, no. There's way too much money and risk involved. As with most transactions, control is held by the guy holding the money, and that's the builder.

However, these guys know how to write contracts with the subs to make sure that at least on paper, all the control is held at the lowest possible level. That keeps any paper trail or "smoking gun" from existing.

Of course, if you represent the worker, you could just sue everybody and make them talk. However, as a practical matter, that isn't going to help. The builder will be represented by a sharp lawyer like huisache. He's going to coach them and make sure they verbally back up what's in the contract - and that means playing powerless.

What about the sub (the guy who picked up the crew of Mexicans including your client)? He's uninsured and owns nothing but a 1985 Ford F-150, a few saws, and some hammers - hardly enough to pay off a $200,000 hospital bill. Might he testify against the builder? Not if he ever wants to do business again.

That leaves the actual Mexicans themselves. Are they going to testify against the builder? First, you have to find them. Good luck with that. They're usually hired on extremely informal terms. A lot of the time, the sub doesn't even know their real names. He might have a cell phone number, but what good is a prepaid Cricket number that was disconnected 6 months ago?

Second, if you find one, what are the odds that he'll have knowledge of the real control held by the builder? Does he hear private conversations between his boss and the builder? Probably not, and even if he did, he doesn't speak English. And keep in mind that just saying, "oh yeah, the builder was in charge" isn't enough. He needs to be extremely specific.

Third, even if he can give you the testimony you need, the builder and the sub are going to threaten the **** out of him. If he ever testifies against them, ICE is going to be called on him, and he's never going to work in construction again.

Suppose you get lucky, and somebody screws up on the defense side. A disgruntled employee of the builder testifies against it, or somebody can't keep their story straight and you get the actual control held by the builder is established by testimony, and you take your case to trial and win. There's a mountain of appellate and Texas Supreme Court cases that have reviewed the trial evidence of control and said "this isn't enough evidence of control for us." (There are virtually no such cases upholding a finding of control handed down in the last 20 years. I know of 1, and that was about 11 years ago.) It's one of these areas of tort law where officially there is a remedy, but in reality there isn't. You're never going to find the evidence you need, and even if you do, the Texas Supreme Court will find some reason why it's not sufficient for them. They've been paid enormous amounts of money by Bob Perry and people like him to do that, and they do it very well.

But it's OK because your average Republican primary voter is an idiot. He doesn't even know what the Texas Supreme Court actually does and certainly doesn't understand the implications of its rulings. He's just looking for the right slogans about "not legislating from the bench," etc., all while he's getting bent over and financially sodomized to fund expensive healthcare programs and keep the public hospitals open.
 
No doubt this is a problem. But workers compensation is also ripe with fraud and is the demise of many small businesses due to incredibly high premiums. Some jobs are inherently dangerous. Does anyone insure the guys featured on Deadliest Catch? Same as insuring an overweight smoker - the premiums will never outperform the claims.
 
I think that this is a large part of why politicians look the other way. They know doing it the right would drive the cost of doing business way up. Paying these expensive hospital bills is just another form of corporate welfare such as food stamps. It is a direct benefit to the little guy but the big guys end up with all the profit and want to keep the gravy train going.
 
I know this is going to strike a nerve and believe me I am no fan of insurance, but attorneys play a role in this as well.

My guess is that if there is no insurance policy, the ability for the lawyers to get paid is substantially at risk. I understand everyone complains about attorneys until they need one and I have ongoing legal representation that protects my business. But I have seen many frivolous claims get paid, I have seen many businesses destroyed due to high insurance costs and I know that the current situation is not right. However, hard to blame just one party in this industry or many others.

I do not have the answer nor will I begin to think I know more than you. You live it daily and I learned much from your post.
 
Mr D It is a strange policy, not requiring employers to have workers comp.
BUT if an employer opts out that employer must notify the Texas division of Insurance AND notify the employees.

I would think it would behoove an employer to get the workers comp.
Even a small subcontract can get temporary workers comp if he is going to be hiring other workers. Of course most subs hire ' independent" workers to skirt the issue.

I am pretty sure all public construction work( cities, schools counties state etc) do require workers comp but there are many ways around that as well.

I would be absolutely for strict really strict enforcement of this IF there was also strict, really strict investigation of fraud.
There should be protection for the worker but also protection for the employer against fraud.
 
Thanks for the detailed reply. I said upfront that I do not know enough about the issue except for being on the receiving end as a business owner.

To answer your question, I do think carriers charge too much.

As for the rest of your post:

Frivolous claims occur every day. Workers do make claims of injury to leave work. Yes, not all are frivolous, but they do happen. In many cases, they are just paid to avoid problems and legal costs. Also, other legal claims are filed all of the time that are too small to defend per the carrier. Too small as they mean by the time they pay for an attorney and court costs, they are better settling out of court. Guess who ultimately pays? This also exacerbates the problem because many of these people just continue this process over the years.

I know this is not necessarily related to workers compensation, but I have tried to help employees with personal injury claims. Generally, the first questions out of my friends and family who are attorneys ask, "How bad are they hurt and is there an insurance policy involved?"

I know you believe the majority of the problem is the carriers - as any attorney would believe. However, I also know you are smart enough to realize that there are many components to the problem including the legal community.
 
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