New law benefiting Utah construction companies

MURRAY — A year ago, Dennis Chavez feared for the future of his drywall business.

Today, things are looking up for Chavez LLC, now that Utah has started enforcing a law intended to protect construction companies such as his.

"We're very hopeful things will turn around — not from an economic standpoint because the economy is what the economy is, but from the levelness of the playing field," he said.

Chavez is referring to attempts over the past three years to classify construction workers as "owners" of limited liability companies. Critics say the process had allowed for those LLCs to circumvent the state's payroll tax, worker compensation and unemployment laws.

Sen. Karen Mayne, D-West Valley City, calls the law that went into effect July 1 "landmark" legislation and a model for other states to follow.

"We needed to save our employers. We needed to save our employees," Mayne said.

The law is specific in defining the role of employee and owner to ensure workers' rights are protected and companies carry workers' compensation insurance and pay unemployment insurance premiums.

To be classified as an owner, a person must be an active manager, hold at least 8 percent ownership interest or not be subject to workplace supervision.

— Lori Prichard