MacIver News Service | July 25, 2019
By M.D. Kittle
MADISON, Wis. — “Titanic” didn’t need a spoiler alert.
And it doesn’t take a genius to see where Gov. Tony Evers’ Joint Task Force on Payroll Fraud and Worker Misclassification — loaded down with Big Labor representatives — appears to be heading.
The vast majority of public members on the task force — five of six — are union leaders or have deep ties to organized labor, according to a membership list obtained by MacIver News Service.
Even some of the state bureaucrats who round out the investigative panel are closely connected to Big Labor.
Business advocates expressed concern about the outsized role labor looks to play on the task force.
“If that’s the way the makeup of the task force remains, then I think that’s really unfortunate and a missed opportunity,” said Scott Manley, senior vice president of Government Relations for Wisconsin Manufacturers & Commerce.
There is also concern from construction industry officials that contractors are being unfairly targeted. Misclassification of independent contractors occurs among janitorial services, Internet providers, and throughout the exploding gig economy, too. But the task force, at least based on the initial rhetoric, seems fixed on the construction trade.
In April, Evers, surrounded by Wisconsin union leaders, signed the executive order creating the task force.
Call it return on investment. The Big Labor governor’s campaign hauled in north of $1.57 million from unions, or about 40 percent of the nearly $4 million Evers collected in campaign contributions. The Carpenters union, for instance, contributed $172,000 to Evers’ campaign.
They expect to get their money’s worth. The task force, it would seem, is a good start.
“This executive order shows that the new administration is committed to improving the lives of construction workers in Wisconsin and that Wisconsin supports small business owners who have had to compete against unscrupulous contractors who hurt Wisconsin taxpayers, businesses and workers,” stated the International Union of Painters and Allied Trades District Council 7 in an April press release.
Andrew Buck, director of Government Affairs for IUPAT DC7, was named to the task force, according to a document released this month but apparently not made public. (***Editor’s Note: The Evers press office and the Department of Workforce Development refused to return MacIver News Service’s multiple requests for task force member names. MacIver finally obtained the document via request to the office of Rep. Warren Petryk (R-Eleva), a member of the Assembly’s Labor committee.)
Buck is joined by Mark Reihl, Unemployment Insurance administrator for the Department of Workforce Development. Before joining the Evers administration, Reihl for years served as executive director of the Wisconsin State Council of Carpenters and political director for the Wisconsin division of North Central States Regional Council of Carpenters — background not noted in the DWD press release announcing Reihl’s hiring.
Also on the panel, Stu Wilson, Local Sheet Metal Workers’ business representative from Milwaukee.
There is no doubt that payroll fraud is a problem among a small group of employers. They intentionally slap the “independent contractor” label on employees to avoid paying unemployment and other benefits and wages workers are entitled to.
A Department of Workforce Development audit found 8,677 misclassified workers in Wisconsin last year, generating nearly $2 million in unemployment insurance taxes, interest and penalties. DWD’s misclassification union found approximately $70 million in wages had been unreported.
But a big part of the misclassification problem is the patchwork of confusing, disconnected labor laws that have cost well-intentioned businesses big, industry advocates say.
“Not only do we have multiple different standards for somebody who is an employee and somebody who is a contractor, the standards themselves are very confusing and very difficult to decipher and pin down,” Manley said.
Unemployment compensation, for instance, includes a two-part test to determine whether a worker is “free from the control or direction of the employer.” If yes, then there are nine standards outlined, six of which must be met in order for the worker to be classified as an independent contractor. But under worker’s compensation, all nine criteria must be met.
The task force includes Cynthia Buchko, general counsel at Construction Business Group, a Madison-based labor-management organization led by some of the biggest union bosses in the state. The group’s executive director is Robb Kahl, a former Democrat lawmaker with deep ties to Big Labor.
Even business leaders named to the board have a union tilt. Pete Braun, owner of union drywall shop Wall-tech Companies, is on Construction Business Group’s board of directors. And task force member Jerry Shea is president and operations manager of Eau Claire Union contractor Market and Johnson.
Gary Rockweiler, CEO of Rockweiler Insulation in Verona, appears to be the only public member not associated with organized labor.
“It just makes sense that if you’re going to revisit these issues do so with the perspective of the very people charged with making a determination as to whether someone is an employee or contractor — and that’s the employer,” Manley said. “The employer plays a very significant role in all of this and to minimize that … I think that’s a very big mistake.”
The list of task force bureaucrats includes DWD Secretary Caleb Frostman, a Democrat who briefly served in the Wisconsin Senate; Maria Guerra Lapacek, an assistant deputy secretary for the state Department of Revenue who previously worked for Chicago Mayor Rahm Emanuel and was creator of a city campaign urging cab riders to, “Be Polite, Not Violent. Respect Your Taxi Driver!”; and Steven Peters, DWD Worker’s Compensation Division administrator who once served as legislative aide for union darling and former state Rep.-turned Green Bay Mayor, Eric Genrich.
As of Thursday, the task force had yet to meet.
Kooyenga said he’s still learning about what the panel aims to do.
“The governor obviously created a task force because he believes there is a problem. That will be step one, to see if there is a problem here to be solved. If there is no problem to be solved our work will be done,” Kooyenga said.
The senator said he is isn’t making any judgments ahead of time on the composition of the task force, its union or non-union membership.
“I believe the vast majority of employers want to do the right thing, but they also want to have viable businesses,” he said. “What’s important, as we go through the issues, is to differentiate between ignorance and outright fraud.”