Disreputable construction companies soon may no longer escape paying workers' compensation, contributing to unemployment insurance and withholding taxes by declaring workers as owners instead of employees.

The Utah Senate voted 27-0 on Friday to give preliminary approval to SB35 to stop that practice. A final vote is expected next week.

"This is commerce with a conscience," said Sen. Karen Mayne, D-West Valley City, sponsor of the bill.

She explained that her bill would mean, "If you own 20 percent of a company, you are an owner. If you own 19 percent or below, you are an employee," and the company must pay taxes and workers' compensation while heeding worker-protection laws.

Mayne — whose late husband, Sen. Ed Mayne, was president of the Utah AFL-CIO — said that reputable construction companies complained to her that they often are underbid by disreputable companies that lower costs by declaring their employees as owners.

She said the practice has allowed some companies not to verify whether workers are in the country legally and has allowed them possibly to pay low wages and escape normal worker protections.

"We want to know your name. We want to know your Social Security number. We want to know where you live," she said. "We want to know if you E-Verify."

Mayne said one company claimed to have 900 "owners" to escape worker benefits, but only four people had registered with the state as true owners.

"It isn't a fair playing field," said Sen. Wayne Niederhauser, R-Sandy.

"My only concern," Sen. Curtis Bramble, R-Provo, said, "is that it does not go far enough to cover all bad actors" and covers only the construction industry. "Still, it's a huge step in the right direction and may be one of the most important bills that we pass this session in terms of protecting employees."

ldavidson@sltrib.com