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Michigan House Democrats announce bills targeting payroll fraud

Close-up of deductions on a paycheck.
Stephanie Frey - stock.adobe.com

Michigan House Democrats announced a bill package Wednesday to fight what they described as payroll and tax fraud.

They said the fraud occurs when employers treat contract employees as regular staff without paying benefits or unemployment and other taxes.

“They’re misclassifying employees as independent contractors and not paying taxes like the rest of us who play by the rules," House Minority Leader Donna Lasinski (D-Scio Twp) said at a press conference Wednesday morning.

"They’re not paying their employees the overtime that they’re owed. They’re dodging worker’s compensation and unemployment benefits. They’re not playing by the rules and they’re cutting corners to get ahead,” she said.

Supporters said the bills would keep workers from misclassifying employees as independent contractors, strengthen whistleblower protections, and increase penalties for wage theft.

Another piece of the legislation deals with non-compete agreements, banning their use with “low wage” workers.

Jimmy Greene, president of the Associated Builders and Contractors of Michigan, said he would support that part of the package.

“I think these folks should be free agents out there, especially our construction folks. There’s so much work out there. If there’s an opportunity for somebody to make more money, whether that’s union or non-union, then God bless them. I don’t think a piece of paper should hold them hostage,” Greene said.

Democrats have introduced similar bills in past legislative sessions without success.

State Representative Terry Sabo (D-Muskegon) said he’s doing everything in his power to get Republican support for the package.

“If these aren’t the right bills, then give us something that we can work with to try to — to get the problem resolved. Because, quite frankly, that is the end goal,” Sabo told reporters.

It’s unclear if the bills will move forward this time around.