Associated Press - March 18, 2010 2:25 PM ET

LINCOLN, Neb. (AP) - Nebraska lawmakers are clamping down on construction contractors who avoid paying taxes and benefits to workers by calling them independent contractors instead of employees.

A bill (LB563) that got first-round approval on Thursday would impose stiff fines against contractors and trucking companies that treated workers as independent contractors when they were in fact employees, as defined in the bill.

Sen. Steve Lathrop of Omaha introduced the measure. He says a growing number of contractors use the current loophole to get cheap labor and undercut legitimate businesses.

Legislative fiscal analysts have estimated the practice reduces state revenue by about $5 million a year.

On the Net:

Nebraska Legislature: http://www.nebraskalegislature.gov

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