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Investing in Iowans will help grow our economy

January 30, 2011
State Sen. Tom Rielly (D-Oskaloosa)




This legislative session, we are staying focused on creating good jobs and improving the economy.

We won’t accomplish those goals by shutting down credit to small businesses, closing preschools or letting tobacco companies target our young people.

Unfortunately, that’s all included in the first bill taken up by the Iowa House this session.

It would eliminate our state’s successful public-private preschool partnership, an effort that has given thousands of Iowa kids a great start in the classroom. Closing preschools would increase the financial burdens on working families struggling in today’s tough economy.

The House bill also cuts efforts to discourage youth smoking, which leads to early deaths and increased health care costs. And it shuts down low-interest loans to small businesses that help create local jobs.

The House bill could save the state about $6 million this year, according to the nonpartisan Legislative Service Agency. That’s less than one-tenth of one percent of the state budget! Does it really make sense to cut preschool, anti-smoking efforts and small business loans for these modest savings?

Instead of hurting the children who are our state’s future, I am committed to targeting help to small businesses and rural economic development. If we work together, we can do it without harming educational opportunity and increasing health care costs.

And that’s something we can all agree on.

Creating good jobs means playing by the rules

The great majority of Iowa employers respects and looks out for their employees. But by engaging in employee misclassifications, the bad actors threaten our state’s economy and harm businesses and hard-working Iowans that play by the rules.

There are more than 72,000 law-abiding employers here in Iowa. They correctly classify their employees, report quarterly wages and pay unemployment taxes. Yet they’re put at a competitive disadvantage by the employers who skirt the law.

The chief problem is employee misclassification. It occurs when employers wrongfully treat workers as “independent contractors” or pay the workers “off the books.”

In July 2009, we launched a Misclassification Unit at Iowa Workforce Department to address this problem. The misclassification unit reported recently that:

** 230 employers misclassified 2,602 workers.

** Total unreported wages were $61,073,494.

** Total state unemployment taxes due were $2,081,850.

When the Misclassification Unit finds violators, they collect the unemployment taxes owed and refer the case to the Department of Revenue and to Workers Compensation so that they can collect other taxes owed.

Thanks to these new efforts, we’re leveling the playing field for those businesses that follow the law and ensuring workers get the pay and benefits they deserve. For more information, go to:

www.iowaworkforce.org/misclassification/





This is a legislative update from Senator Tom Rielly, representing Iowa, Poweshiek, and Keokuk counties, and portions of Mahaska and Tama counties.

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