Utah Construction Lien Laws: 2013 Construction Legislation

Currently, there are a handful of bills being considered by the Utah Legislature which affect the construction industry.  The first is House Bill 277 Building Code Amendments which is adoption of the 2012 International Building, Plumbing and other codes.  This bill is based upon recommendations to the international building codes by the Utah building code commission and was approved by the interim business and labor committee during the interim session. 

Another interesting bill is Senate Bill 44 this bill is designed to prohibit limited liability companies from unfairly competing against other construction businesses.  Specifically, there are some companies in the State which attempt to avoid payroll taxes, self-employment taxes, workman’s comp and other insurance obligations by having multiple owners rather than employees.  As a result, these companies, in some cases, have over one hundred owners and since these individual owners go out and do the work, they operate under the licenses of other individuals acting as qualifiers for the company and the company doesn’t have an obligation to withhold any payroll taxes because the people who are their “employees”, are actually treated as “owners” and therefore the individual owners have an obligation to do their own withholding.  The result of all of this is that the company reduces its tax and insurance obligations and pushes those off to the owners.  Typically, the owners really have no knowledge as to their obligation to do tax and other withholding and as a result are able to unfairly compete with businesses that are operating correctly. 

Senate Bill 244 requires every individual owner who is performing work to be licensed to do that work rather than relying upon a separate qualifier and also requires a substantial amount of reporting to DOPL to make sure that the companies are complying with tax withholding and other regulatory obligations.