Transcript: Testimony by Matt Anderson on the use of independent contractors & payroll fraud – Nov. 12, 2013

Partial transcript of the verbal testimony given by Matt Anderson, a residential construction trim installer from Michigan, on the impacts of misclassifying employees as independent contractors and payroll fraud. The Senate Health, Education, Labor & Pensions subcommittee on employment and work place safety hearing was held on Nov. 12, 2013:

Chairman Casey, Ranking Member Isakson, and members of the subcommittee, my name is Matthew Anderson. I’m a resident of St. Clair County in the state of Michigan, where I live with my wife and two wonderful children.

Thank you for this opportunity to speak with you today about how payroll fraud has harmed my family and thousands of other families across this country.

Currently, I am an estimator for a construction company. But previously, I was a working carpenter. I made cabinets, installed the interior trim, laid crown moulding.

My employer was RUSH Construction Services, Inc.

RUSH had a contract with the carpenter’s union and they paid me an hourly wage, health, and pension benefits. There was training and daily instructions. I was supplied with building materials, power tools, and other construction equipment. When I made mistakes or didn’t meet production quotas, I got a tongue-lashing.

RUSH deducted income taxes. They paid employment taxes, and they paid unemployment contributions. They paid time and a half for overtime, and they provided me with worker’s compensation protection.

In other words, I and my fellow workers were employees. That is how it was for six years.

But things changed for the worse. We were told the recession cut into RUSH’s bottom line, and they were having problems competing to get jobs.

Mr. Marty Steele was the owner of RUSH. Mr. Dave Marracco was his right hand man.

They told us they wanted to switch over to another company they jointly own – Dave and Marty, Inc. – DMI.

We were given a choice: Work for DMI as independent contractors or don’t work at all.

My fellow workers and I have families to support. We’d seen how bad the economy was. So we went along with it.

Mr. Steele and Mr. Marracco directed us to register as DBAs – Doing Business As persons. I passed these instructions on to my wife, and she did the registration. I was never incorporated. I never had a business card. I never operated a business. Still, the simple DBA registration would come back to haunt me because DMI knew what they were doing.

DMI’s official address was Mr. Marracco’s house. The actual business office was still RUSH’s.

I worked for DMI for two-and-a-half years. There was training, daily instructions. I was supplied with building materials, power tools, and other construction materials. When I made mistakes or didn’t meet production quotas, I received a tongue lashing. So, I was still treated the same as before.

But instead of being an employee and receiving a W-2 at the end of the year, I received a 1099 form.

There were no more deductions from my pay. I paid my portion of employment taxes and I paid DMI’s as well. There were no more health and pension benefits. And we didn’t get time and a half for overtime.

Then, on Feb. 9, 2011, my life changed forever. My left hand slipped into a table saw, severing my ring finger and severely damaging three others. I was rushed to the hospital for emergency surgery for them to try to save my hand. While I was at the hospital, I was told that my medical bills would not be covered because I was an independent contractor.

My medical treatment was long and painful. So far, I’ve had eight surgeries and still need one more. The damage was so bad, they had to take bones from my wrist and hip and the doctors also needed to take bones from a cadaver to do the reconstruction.

During this time, I couldn’t work and my medical bills piled up, and in a short time they’re in a range of $100,000. That’s more than I and my wife make in an entire year.

I filed a workman’s compensations claim. DMI claimed I was an independent contractor, and they refused to pay.

I was pressured to settle with DMI and their insurance carrier. In the end, my family and I were left with our credit ruined and still owe $25,000 in medical bills.

This has been a nightmare for my family. A few years ago, my family and I felt secure. We’re a middle-class family paying our bills, playing by the rules, and living a comfortable life. Now, we live paycheck to paycheck just to make ends meet. I struggle to hold down a job, and I struggle to pay my medical bills. And in the meantime, DMI continues to bid and get work and make money.

I work now as an estimator, and I see firsthand how companies like DMI would force their employees to become independent contractors, then they underbid law-abiding companies who pay their taxes and protect their workers.

I’m here today to tell my story about what happened to my family so it doesn’t happen to any other families.

I respectfully urge you to end this unfair practice that has harmed my family and thousands of other families across this country.

Thank you.

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One Comment on “Transcript: Testimony by Matt Anderson on the use of independent contractors & payroll fraud – Nov. 12, 2013

  1. Pingback: Transcript: Remarks by Sen. Johnny Isakson on the use of independent contractors & payroll fraud – Nov. 12, 2013 | What The Folly?!

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