An Interesting Rip-Off--I Mean, Approach, in Utah

Quite the news story today from Utah. Authorities there are looking into a situation where, reportedly, "thousands" of Utah construction workers have been forced to become "owners" of their own businesses, and thus responsible for their own Workers Comp and Unemployment Comp costs. Of course, as "owners" they still don't get to set their own hours, or where they work, and can even be fired from the worksite.

This clever little bit of "reclassification" is orchestrated by a company in Utah that sells it's services to interested employers. By using their services, employers change their employees into "owners" of the other company, and thus they all become responsible for their own payroll taxes, unemployment, and Workers' Comp.

This is done by making the former employees "owners" of an LLC--on paper, at least. The LLC that these folks become "owners" of is the company selling the service to their former employer.

Given the way of the world, I would expect this neat little trick to spread to other jurisdictions, if it isn't snuffed out fast. Mind you, I suspect that ultimately this chicanery won't pass muster with the authorities, but before that happens there will be ample opportunities for people to be maimed and killed without having proper Workers Comp coverage.