Worksite Safety

The Problem

Building Austin, Building Injustice: Working Conditions in Austin Construction Industry

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Despite the important contributions of the construction industry to the Texas economy, Texas construction businesses face a challenging market where investing in sustainable business practices can place them at a short-term competitive disadvantage to companies who take short cuts on safety and workforce development.

Poor business practices also result in high costs to taxpayers, homeowners and working families.

Honest Businesses Can’t Compete
While there are many honest contractors out there doing the right thing, they are forced to compete with contractors who break the rules to illegally cut costs and gain an unfair advantage. Dishonest contractors undercut other reputable companies when they:

  • Fail to pay their employees. A recent study by the University of Texas found that one in five construction workers in Austin has not been paid for their work at least once in the last three years.
  • Deny construction workers proper safety equipment and provide no safety training, leading to expensive injuries, work slow-downs. These are practices that can tarnish the industry’s reputation. One in five of surveyed construction workers have been seriously injured on the job, requiring medical attention. Sixty-four percent of workers reported that they had never received basic safety training, and 29% report that their employers fail to provide them with hard hats.
  • Gain an unfair tax advantage by misclassifying employees as independent contractors, thus, cheating on their payroll taxes including federal taxes and state unemployment insurance. A recent Texas Workforce Commission (TWC) audit found that the construction industry misclassifies more workers than any other industry in Texas.3 The TWC estimates that $698,122.80 dollars of unemployment insurance taxes are lost on the 2% of employers they audit. That means Texas is losing at least $35 million in unemployment taxes each year.4 (COMING SOON: The Costs of Misclassification). With a historical deficit in the unemployment trust, responsible companies who pay their taxes may be paying a higher percentage on their employees next year.
  • Fail to provide workers compensation insurance, forcing taxpayers and responsible businesses to pick up the cost for the injuries of their employees. Only forty-five percent of construction workers report that their employer provides workers compensation, yet one in every five workers is injured.5 This means that hospitals have to pick up the tab for injured workers. They, in turn, pass those costs on to businesses and families through higher premiums.6 (COMING SOON: The High Cost of Workplace Injuries)

When unscrupulous employers cut corners, they not only undermine high quality construction, they also make it more expensive for everyone to build. Responsible employers pay higher insurance premiums and unemployment insurance tax rates because other companies fail to cover their workers. This leaves honest builders to clean up the mess and to deal with costly consequences such as liens and slow down in building due to employee injuries.

Taxpayers and homeowners pick up the bill
When dishonest contractors refuse to play by the rules they often leave taxpayers with the bill. When employers:

  • Fail to pay their employees, millions of dollars are lost to the local economy each year, resulting in lower sales for local businesses, and decreased sales tax revenue that our state depends on. Workers who aren’t paid are forced to fall back on public safety nets and government assistance in order to make ends meet for their families. Nearly half of surveyed construction workers were unable to meet the basic needs of their families.
  • Refuse to cover the cost of medical treatment to injured workers, hospital emergency rooms are forced to absorb the cost of treating injured construction workers who are denied workers compensation coverage by their employers, leaving the balance to be paid by the rest of us through state trauma money. Also, health districts depend on local taxes to meet increased demand on public hospitals resulting in higher property taxes.
  • Uncompensated care costs due to injured workers also drive up the cost of insurance premiums for families and employers.
  • Homeowners pay the price for construction companies who fail to invest in skilled workers. When builders fail to pay their workers, the result is work slow-downs that can cause delays in home completion. Lack of investment in training and quality materials can also result in poor workmanship on new homes. Homeowner groups in Texas report problems with new home construction ranging from foundation failure, mold, structural problems and clauses in their contracts that take away their legal rights. For more information visit www.homeownersoftexas.org/Home.html

Working Families Pay the Price
The construction industry plays a vital role in our state’s economy, with nearly 600,000 Texans employed in the industry- thousands of working families depend on construction jobs to pay their mortgage and rent. Honest employers help create necessary and good jobs; they also have a positive impact on the local communities in which they operate by allowing workers to invest in the state’s economy and provide for their families. Unfortunately, employers who refuse to play by the rules hurt honest hardworking families:

  • Low wages and wage theft hurts families. Although 71% of workers work more then 40 hours, a week, nearly 45% still live below the poverty line.9 This problem is aggravated when employees are denied payment for their labor it makes it difficult to make ends meet. , According to a recent study undertaken by the University of Texas. Forty-seven percent of construction workers surveyed reported not having enough money to take care of their family.10 With little or no savings, wage theft can push working families into true economic hardship. (see video of Saul Vela to see how wage theft affected one Texas family).
  • Workplace fatalities devastate families. Texas leads the nation in workplace fatalities in the construction industry, with a construction worker dying every 2.5 days. In 2009, 138 workers died in Texas, more than in any other state.11 The death of a beloved family member and a primary breadwinner force many families to not only grieve for a loved one but pushes them into poverty as they struggle to make ends meet.
  • Workplace injuries debilitate working families. When workers are injured on the job and their employer fails to provide workers compensation, workers find themselves faced with expensive hospital bills and no way to support their family while they are unable to work. Without medical insurance, injured workers are unable to access the care they need to recover, extending their time out of work and pushing low-wage families into poverty. Workers report high debt, being forced to sell material possessions, face eviction, and destroyed credit, and being forced to fall back on public safety nets and their families for support. (See video of Pedro Hernandez)