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Barry Gutierrez © The Rocky

Bruce Miller's office wall at Denver Drywall Co. features a copy of the Constitution and Bill of Rights. Losing business to firms he claims are cutting corners on proper documentation, Miller says the country needs a policy that works for immigrants and employers.

Bidding battles not fair, owner says
Claims contracts lost to firms hiring workers off books

By Myung Oak Kim And Fernando Quintero, Rocky Mountain News
February 27, 2007

Twenty years ago, more than 80 percent of the workers at Denver Drywall Co. were young Caucasian men.

Today, more than 80 percent of the company's 500 employees are young men from Mexico.

Owner Bruce L. Miller said he does his best to check whether they are legally in the country. He requires applicants to show a valid Colorado ID - usually a driver's license - and a Social Security card. But he concedes that some, if not many, could be using forged documents.

Miller pays workers compensation insurance and payroll taxes and offers benefits to all his workers. He also lobbies state and federal lawmakers to pass immigration laws that will give illegal immigrants who work hard and don't commit crimes a way to become legal residents.

"We need to create some kind of plan that is good for the United States. It has to be good for immigrants and has to be good for us, the employers," Miller said.

But the construction economy, as it works today, isn't good to companies like Denver Drywall.

Two decades ago, Miller said his company would win up to 40 percent of the jobs he bid on. Today, he's lucky to get 10 percent. He attributes most of that drop to businesses that underbid him because they hire illegal immigrants off the books.

He and others say competing firms are bidding up to 30 percent lower on jobs because they use illegal immigrant workers and improperly classify them as independent contractors, which allows the employer to avoid paying workers compensation insurance and payroll taxes. Employers also use labor brokers, who provide temporary workers at a lower cost and off the books.

"They get away with it because nobody is doing anything to them," Miller said.

In recent years, these companies have underbid Miller by $40,000 to $1 million, depending on the project size, he said.

"If somebody beats us somewhere around 10 percent, maybe 12 percent . . . that is legitimate bidding," Miller said. "But when people come out there and start beating us by 25 to 30 percent, then we know that there's something wrong."

Miller said his company survives because it is one of the state's largest drywall firms, has been in business since 1945 and can bid on complex multimillion dollar projects. Smaller firms are more vulnerable. He said his brother-in-law quit the drywall business because he couldn't compete with firms using illegal labor. Another drywall firm in Centennial shut down last year for the same reason, Miller said.

Mark Rose, general manager of Por Mor Construction in Englewood, said he knows of at least one local contractor who is ready to declare bankruptcy after 15 years because he can't compete. Rose said he was underbid in December by a company that uses labor brokers.

"The system is set up to be undermined, and no one is policing it," Rose said.

Miller said he's lost dozens of employees to firms who lure workers with the same or higher wages, which they can offer because they don't take out taxes. Last year he hired 1,200 people to keep 500 workers.

Laws passed last year by the state legislature are accelerating turnover at his company, he said. Those 17 laws include one that requires a three-step ID verification process to get state benefits and one that requires firms that obtain public contracts to verify workers' immigration status.

Since last summer, dozens of workers have left Colorado to go to other states with friendlier laws, he said.

"They're well aware that Colorado has the toughest immigration rules in the United States," he said.

Miller and other employers have told labor, tax and immigration officials about numerous companies they suspect are using illegal hiring practices. But by the time the government investigates, those people are gone or working under a different name.

"We can point them in the right direction," Miller said. "But when we say, 'Go to that job site,' you need to go right away."

Even though state laws are pushing workers elsewhere, Rose wants increased enforcement of all labor laws.

"There needs to be a fair playing field," he said. "Until there's one, it's going to get worse."

quinterof@RockyMountainNews.com or 303-954-5250

Copyright 2007, Rocky Mountain News. All Rights Reserved.