Out of State Mason Contractors
Under one nation, one flag has never been the issue until recently. Due to the economic down fall the millions of contractors are finding it hard to stay afloat. I have read that around 7% of these contractors has filed for bankruptcy or got out of the business all together. No matter what trade it is I’m sure its happening in all the divisions. Since this is a masonry website I talk about what is going on in its division which is division 4. Out of state contractors and sub contractors in Oklahoma are being beat of bids for commercial jobs all over the state. Reasons for the competition is insurance, wages and taxes all which play a role in lower bids. If Wendland Masonry bids on a $100,000 dollar brick job for a new building we have to consider Oklahoma’s laws that require us to provide Workers comp and General Liability which we cannot opt out of like our neighbor state Texas. This insurance can cost 15%-20% on top of labor cost for employees. The next over head cost is our taxes. A lot of contractors think they shouldn’t pay Oklahoma state taxes when coming from there home state. The contractor fails to register their company in Oklahoma and believe me this hurts the Citizens that have nothing to do with the job from roads to school to welfare and remember the light being shut off for 6 months on our highways. This is money we can have for Oklahomans instead the money goes to the out of state contractors home state where he or she perhaps does not have state income tax like Florida for example. This tax can be the self employment tax and income tax and can add up to be another 20%. After looking at the numbers that bid can be 40% less than a Oklahoma contractor. I am talking about the Masonry. Imagine the General who over sees the entire project. This could be in the millions that is sent over the state border. While this is all happening our follow masons are not working perhaps collecting welfare and not making enough to pay taxes. Oklahoma loses twice in this scenario. While not receiving tax money from our Oklahoma mason contractors they might have laid off dozens of brick layers and stone masons who now needs the assistants to live meanwhile the out of state contractor who did the work left with all the money without paying a dime for tax. Another factor is out of state material. Buy material from a state with no sales tax or much lower sales tax which can cheapen the bid as much as 8% at the same time local business has lower profit margins and may have to lay off workers to keep a float.
Here in Oklahoma we have laws against illegal immigration but when it comes to other states who house illegal aliens they can be working for a contractor and the cost of labor can be much lower than an American workers which will help with getting the job. This is not good for those who play by the rules and will promote law abiding companies to not follow the law as much. Buildings and homes are being built without the knowledge to successfully complete a project to code or to plans and the reason for this is the money is not just not there to do it the right way. The winning bid most of the time went to the lowest bidder and I personally seen some outrageous bids. Just a few weeks ago We bid a Taco Bueno for $50,000 material and labor and was beat by someone from Texas with a bid of $33,000 for the Masonry. The material could easily been $20,000. What about labor, tax, insurance. The money is just not there and if they do have the insurance and pay taxes then what is this building going to look like. I feel sorry for the clients (owners) of the Taco bueno if only $13,000 is going into installing the material. The project had 20 foot walls and lots of tedious inside work. The system requires a installation of Felt paper then lath and then a scratch coat and then installation of stone and then tuck point the mortar joint. Geeez. I guarantee you the contractor installing the stone will either do a shoddy job and not get paid or do a shoddy job and get away with it or do the job and eventually go out of business. The money is just not there for an Oklahoma Contractor to do it for that low of a price due to the overhead Oklahoma requires you to have.
File a 1099 of workers sounds like a loop hole. The E-verify does not require 1099 only w-2’s. The employer gets away with hiring illegally and gets away with the overhead of an w-2 employee. Lots to know here.
Hope you enjoyed the read. When i come up with more I’ll be sure to post it.
