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Employing off the books; the art of getting around workers’ comp

By Fritz Mayer
August 17, 2011

Contractor Patrick Murtagh estimates that there are hundreds of construction employees who work off the books every season in Sullivan County.

Murtagh paid a visit to the Sullivan County Legislature on August 4, and listed various reasons that employment laws should be enforced. Murtagh, who has three year-round employees, pays their workers’ compensation, half of their social security, Medicare, unemployment insurance and New York State Disability Insurance. His employees pay federal and state taxes, social security and Medicare.

Contractors who don’t pay these various state and federal costs can charge lower rates for work, and make it hard for the contractors who do work by the rules to survive.

There was a suggestion that the county could set up a registry where contractors who provide proof that they carry all the necessary coverage could be included, thus the public would know which contractors are abiding by NYS employment rules.

Legislator Alan Sorensen said he thought the idea of a countywide registry was a good one. He said, “If there are that many people not paying into the system, it’s that much more of a burden on the rest of us.”

County chairman Jonathan Rouis, however, said that perhaps the Sullivan County Chamber of Commerce or some other business group would better handle a registry. He said, “The issue for the county is manpower.”

A group of contractors was formed three years ago to examine the issue. Because of numerous consumer complaints about unscrupulous contractors, then district attorney Steve Lungen called for the licensing of all contractors in Sullivan County. The chamber responded by setting up a Contractors Initiative Board (CIB) made up of 23 contractors, including electricians, plumbers and builders, and including such well-known companies as Mountain Construction, Werlau Construction and Catskill Farms.

Murtagh’s position is that enforcement of the state laws should begin with the code enforcement officers (CEO) or building inspectors of the various towns and villages in the county, because for most construction work, such as new buildings or expansions or decks, a permit is required. By state law, permits are not supposed to be issued unless the contractor supplies either a workers’ compensation certificate, a letter of exemption or documents showing the work is being done by the homeowner.