ANCHORAGE (KTUU) - An Alaska contractor has withdrawn his claim contesting multiple fines totaling $280,000. These fines were placed on Mark Welty, operator of North Country Services, after an employee was crushed and killed by a retaining wall in September of last year.
According to the Alaska Occupational Safety and Health Association, Welty illegally claimed employees of his were actually "independent contractors," thereby escaping the costs he'd need to pay for actual employees. These costs include safety and health benefits, workers compensation, minimum wage and overtime compensation, unemployment coverage, and other benefits.
The issue gained attention when Nicholson Tinker, an employee of Welty, was killed while exposed to what the state called "unsafe working conditions."
In Sept. 2016, Tinker and another coworker were working on a damaged wall in an Anchorage home, preparing it for demolition. Tinker was in the "fall area" while they worked on the structure, and upon taking out the final support, the wall collapsed, killing him.
"Demolition work can be very hazardous," said Deborah Kelly, director of Labor Standards and Safety. "You're working with these structures that you're taking apart. And in this case it was a retaining wall that had been damaged by water and by an earthquake and it was visibly sagging inward. And so Mr. Tinker was asked to go and work on that structure. [...] Had he been considered an employee, [Mr. Welty] would have trained him and made sure that the work environment was safe by doing a pre-demolition engineering survey and by bracing or shoring up that area."
According to Kelly, while the illegal miscategorization of employees is sometimes done by employers to cut costs, it could cost employees their lives. "Mr. Mark Welty showed a plain indifference towards his employees' safety or health, and he did that by classifying employees as independent contractors and not taking any responsibility at all for providing them with a safe work environment," Kelly said.
Basically, the categorization of employee or independent contractor is based on who is controlling the work site. In the case of an independent contractor, they own and operate a business, and are hired to do a job for you, independently, doing the work and then leaving after being compensated. With an employee, you are on the payroll, a single person not connected to any professional business, who takes a paycheck and does work at the direction of the employer. "It's quite a bit different than the independent contractor running their own independent business," Kelly said.
Kelly said that while employees being categorized as independent contractors hurts employees, as in the case of Tinker, it can also hurt small business which actually do play by the rules. "Businesses operating legitimately and doing all these things get underbid by these businesses who illegally mis-classify their workers and by doing so cut labor costs," she said.
The actual sum of $280,000 came from the state seeking the maximum of $70,000 for each claim of misconduct, of which there were four. Welty's withdrawal of his contest against the fees means he will have to pay up.
“Nothing can bring back Nicholson Tinker. I hope this fine sends a clear message. When employers like Mark Welty endanger their workers and unlawfully classify them as independent contractors, our department will seek the strongest penalties possible,” said Alaska Labor Commissioner Heidi Drygas.
KTUU reached out to North Country Services, but they have not been available for comment. This story will be updated when or if that happens.