Top 7 Ways Union Contractors Cheat Their Union and Employees

Union Contractors and Audit
The dreaded audit

Union Contractors and the Union – The Relationship

So I’ve teased my readers on Facebook and Twitter so I should probably deliver. Over the course of two decades as a union tradesman

Top 7 Ways Union Contractors Cheat Their Union and Employees
It’s like magic!

and contractor I’ve seen my share of ups and downs in the plumbing trade and as most of you also know it’s been way down for over half a decade. There is one thing that remains constant in the good times and the bad, union contractors will and do cheat their signatory union and union employees. I can feel it now, disbelief, outrage, indignation, not in my union. Yes, in your union. I think before I explain how this is done I should explain a bit about the process of union benefits for the readers unaware of the relationship between unions and their signatory contractors.

How the Union Contract Works

Signatory contractors are contractors that sign a contract with a union or collective bargaining entity that spells out in detail what each worker should be paid, how many hours makes up a work day, what constitutes O.T. and what type of work the worker can perform (for instance a plumber cannot do sheet metal duct work and an iron worker cannot work the jobsite elevator). I am simplifying this agreement because it is usually a massive publication. Obviously, one of the most important sections in the agreement is what to pay the employees for straight time, O.T. and Double Time there is also a detailed breakdown of what the contractor has to pay per hour as a contribution to benefits like, Health & Welfare, Retirement, Promotion/Marketing, Legal, etc.  Some unions have fewer benefits and some have more but that’s a good cross section of normal benefits. At a date during each month as defined by the signed agreement the contractor must pay the union for each benefit per hour, per employee. I can tell you that in the big municipal areas around the country the cost per month, per employee working full time is between 3K and 4K. For all of you that are extending that over the course of a year that number is correct, 36K to 48K per year, per employee. The contractor hasn’t even paid wages yet. Yes it’s expensive!

Union contractors
The dreaded audit

If the money isn’t paid by the predetermined date, penalties and interest begin to accrue. If the contractor continues to be delinquent the union will pull the workers leaving the contractor with no workers to complete the project/projects. It’s a cruel world but like we say in the business “no ticky, no washy”. If you don’t like the terms don’t sign the contract. The only way the union can be sure all benefits are paid is through union payroll audits as defined by the above referenced agreement. Sometimes it’s every 3 years or 5 years or in some cases never. A union can audit the financials and payroll of a contractor at any time if they have evidence of payroll improprieties.

Money and Survival are the Root of This Issue

Now that you’ve seen just how much money is involved in manpower I don’t think it’s a stretch for you to imagine a business owner trying to minimize those costs anyway possible. Just so we’re clear we aren’t talking about our labor becoming more efficient, where there is money to be made there is larceny. So in good times there are those that are just greedy and in bad times there are those that are desperate, in either situation the games being played are the same but business owners have become real good at hiding things. The following are some of the most common tricks contractors perform to cheat their union, their employees and ultimately the industry because they use these techniques to be low on projects as well. I hope you enjoy. If you are a contractor doing some of these things, sorry someone had to talk about it and if you are an employee partaking in some of these schemes you’re only hurting the industry and your fellow union workers.

Please Click Here for Part 2 – Let’s Count the Ways Union Contractors Cheat

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