The all-consuming drive to keep construction costs as low as possible, and the intensity of the competition among subcontracting companies to get work, has pushed things to the point of absurdity.
“I have contractors tell me they bid on projects at zero or 2 percent [profit margin] and still get under-bid by $200,000 or $500,000,” Spaziani says. “The bar has gotten so low… that the only corners they can cut are the labor costs.”
She says she’s heard of contractors submitting extraordinarily low bids “just to keep their people on the payroll” rather than to actually make money.
“I have contractors telling me, ‘I could not do that project if I knew I had to pay taxes or that I had to have workers’ comp,’” Spaziani says.
Spaziani says major corporations like Walmart often use out-of-state contractors that aren’t familiar with Connecticut labor-law requirements, and that adds to the problems.
The kicker to all this is that major corporations and their general contractors aren’t held responsible if the subcontractors they use are violating labor laws. “There’s no liability on private projects” if a subcontractor is skirting the law, Spaziani says.
So the owners of projects (like Walmart) and their general contractors and construction managers continue to save money by using subs that continue to cut corners by shortchanging their workers and the state on labor costs and taxes.
Until the big-money companies in charge of these projects are made to feel some of the financial pain for violating labor laws, Spaziani says, these problems won’t be solved.
“We’re just hitting the giant on the ankles,” she says of the state’s efforts to enforce labor laws, “but we’re not knocking the giant down.”