PORTLAND — The City Council Finance Committee on Sept. 23 will consider an ordinance requiring background checks on city contractors and giving preference to those who use local labor.

The proposal, called the “Responsible Contractor’s Ordinance,” would require contractors to submit certification before being awarded city contracts of more than $10,000.

That certification, to be completed on forms provided by the city, would collect information about past work performance and history, as well as qualifications and capabilities.

Crystal Canney, of Canney Communications, said she was hired by the Maine State Building & Construction Trades Council to promote the new rules.

Canney, who declined to identify the other affiliated groups ahead of the Sept. 23 meeting, said the ordinance would allow the city  to reduce instances of worker misclassification. 

“Especially in the construction industry, this is a big problem,” she said.

Misclassification occurs when contractors identify workers under their direct supervision as independent subcontractors, rather than employees. In doing so, the contractors are not obligated to pay for worker’s compensation, unemployment or health insurance.

Canney said worker misclassification results in cost shifts to taxpayers when those workers are laid off or injured. It also allows some workers to be paid with cash, under the table, to avoid paying taxes.

“When it comes to publicly funded projects we need to make sure that all laws are being followed,” John Napolitano, president of the Maine State Building & Construction Trades Council, said in a press release.

“When misclassified workers are injured on the job, in many cases, they end up in the emergency room, because they have no choice and that means Mainers again foot the bill with increased insurance costs,” Napolitano said. “When misclassified workers show up to collect unemployment or workers comp, they do not have any benefits to collect.”

But Patrick Simmons, legal director of the Springfield, Va.-based National Right to Work Legal Defense Foundation, which defends workers from what it calls “compulsory unionism,” said portions of the ordinance discriminate against non-union workers.

“They appear to make some sense,” Simmons said. “But when you get into them you realize they’re often times designed to make sure the contractors to union.”

Simmons said 90 percent of all construction workers nationwide are nonunion.

He said a requirement that contractors and workers undergo a registered apprenticeship program are discriminatory, because those programs are typically run by unions.

“Basically, the only way to fulfill them is through the union,” Simmons said. “Inevitably, it’s going to mean more dues for union officials and that’s what they’re after.”

Canney said she does not believe the proposed ordinance would put the city at a disadvantage when trying to get the lowest bids on construction and public works projects.

“The public is paying for it one way or the other,” she said.

According to an outline of the proposed ordinance, preference would be shown to local contractors using local labor for city projects. It would also address potential penalties for employers who are repeat offenders, and require verification of worker’s compensation and unemployment benefits.

The background check would focus on criminal history and whether the company has ever violated wage laws, been barred from government contracts in the prior three years or been convicted of an industry-related crime within the last 10 years, among other things.

Once the contractor has been chosen, the city would receive a list of subcontractors who will be used. Subcontractors would then be subject to the same certification process.

Canney said her firm has presented the proposal to a dozen stakeholders and has received an enthusiastic response.

“It really encourages sustainable wages and benefits,” she said. “It’s the right thing to do at the end of the day. We should keep our money local.”

City officials, however, have been less enthusiastic. Canney said they prefer instead to wait for a formal presentation.

City Councilor and Finance Committee Chairwoman Jill Duson could not be reached for comment on Monday.

City Hall spokeswoman Nicole Clegg said public comment will be taken at the meeting, but the committee will not take any formal action at that time.

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net