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State forces contractor registration

Paul Snyder

Groups representing Wisconsin builders worry the Department of Commerce’s mandatory contractor registration rule is just the start of state efforts to track construction companies.

“I understand the state is trying to go after the bad actors,” said Brad Boycks, director of government and political affairs for the Wisconsin Builders Association. “But that’s about 10 percent of the contractors out there. So, meanwhile, the other 90 percent, which is mainly our members, have to jump through another hoop.”

The Wisconsin Department of Commerce last week enacted a rule requiring contractors to register with the department’s Division of Safety and Buildings. The rule applies to those contractors whose work is regulated under any DOC codes affecting public and commercial buildings, one- and two-family dwellings, and public swimming pools.

Zach Brandon, a DOC executive assistant, said the registration creates a statewide registry that enhances communication between contractors and building groups. Also, the registration, he said, will help the DOC, the state Department of Workforce Development and the Department of Revenue work together on issues such as workers’ compensation and worker classification.

Contactors already credentialed by DOC will not have to register again, Brandon said.

“There’s an expectation from the public that we’re tracking contractors out there,” he said. “And if you’re running a legitimate business, we struggle to find any reason why you wouldn’t apply.”

But Boycks said DWD also has a task force considering rules governing worker classification. He said he does not know if the task force’s aim will change in light of the new DOC rule.

Hal Bergan, a DWD representative and chairman of the task force, said DOC’s rule was “not the sum total” of the task force’s objective.

Mark Reihl, executive director of the Wisconsin State Council of Carpenters and another task force member, said worker misclassification has become a pressing issue in the downturned economy. He said several construction workers on public projects are classified as independent contractors rather than employees, which then renders them ineligible for workers’ compensation or unemployment insurance.

The companies that hire workers as independent contractors, he said, are not required to carry workers’ compensation insurance or to pay unemployment insurance taxes.

The task force goal, Reihl said, is to tighten the reins on contractors circumventing state laws. Although the DOC will help with the centralized database created through mandatory registration, “there are still other things that can be done.”

But John Mielke, vice president of Associated Builders & Contractors of Wisconsin Inc., said ABC worries about further layers of registration for legitimate companies.

“When you have multiple registrations,” he said, “contractors begin to get confused and then frustrated.”

Reihl said he doubts any new rules the task force proposes would be complicated. If anything, he said, they would pay off for companies in the long run.

“To put up with a bit more paperwork for something that’s going to benefit everyone and make things a little more fair,” he said, “is something I think builders would want.”

Brandon said the DOC’s new rule is not deterring activity. Already a week into the registration process, 140 contractors have registered.

“If people weren’t interested,” he said, “you’d think there wouldn’t be much activity until the last minute.”

Mielke said builders must now wait to see what the DWD task force produces.

“I don’t know how many people expected DOC to come out with this rule right now, and I think there are some people nervous about a lack of coordination,” he said. “We don’t want to see rules followed by more of the same rules.”

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