April 1, 2024 | Workers Rights, Political Action
By Kavin E. Griffin
Now that federal infrastructure funding and tax credits for the construction of clean energy and semiconductor manufacturing facilities are being implemented in communities throughout our region, long-awaited construction projects are here, along with the good jobs they bring.
Since passage of the Bipartisan Infrastructure Law and Inflation Reduction Act over a year ago, we have broken ground on historic local projects including ports, dams, bridges, utility scale solar farms, and airport projects. Investments in infrastructure like these are good for our entire economy and spark additional investments in the private sector, like restaurants, housing and development that brings permanent jobs in the community.
This potential for generational economic improvement makes it even more urgent that we address a longstanding crisis in the construction industry. Too often, many construction employers take the low road to win bids, especially for projects that are not protected by prevailing wage laws.
These employers cheat their workers by outright stealing their wages, paying them off the books or misclassifying them as independent contractors instead of employees. Economists estimate that up to 2.1 million construction workers are misclassified as “independent contractors” or paid off the books every year. Go here for data regarding state(s) in your area.
Workers and law-abiding employers will see some relief from the misclassification crisis thanks to a final rule enacted in March by the U.S. Department of Labor, which addresses how to determine whether a worker is properly classified as an employee or an independent contractor under the law.
But the stakes are high, and the consequences have ripple effects beyond the workers whose wages are stolen. A report by the University of California-Berkeley Labor Center revealed that 39 percent of construction worker families nationwide are forced to enroll in one or more safety net programs to make ends meet.
In Oklahoma, that amounts to $96.3 Million annually that we pay to subsize dishonest contractors in the construction industry. As taxpayers, we shouldn’t be supporting businesses that cheat their workers and dodge their taxes. Go here for a selection of state-level reports from the Berkeley study.
Tax and workers’ compensation premium fraud has become so alarming in the construction industry that the U.S. Department of the Treasury’s Financial Crimes Enforcement Network notified banks, check cashing stores and other financial institutions that they must report the suspicious transactions of construction contractors.
We have seen construction industry tax fraud right here in Oklahoma City, OK.
That’s why members of the Central South Carpenters Regional Council are working to make sure our Tax Fraud/ Misclassification Bill, HB 2258 is enforced to make sure employment laws stay strong. Strengthening enforcement is also critical because fraud has, over decades, become a standard business practice in the construction industry.
With tax season upon us, it’s time for all of us to stand up against employers who perpetrate tax fraud in the construction industry. It’s only fair.
On April 11, 2024, members of the Central South Carpenters Regional Council will be joining community leaders across the U.S. and Canada by participating in a Stand Up to Tax Fraud Days of Action event in Scissortail Park at Love’s Travel Stops Stage at 5:00 PM CT. Learn more at www.stoptaxfraud.net/standup.
If you or someone you know has experienced tax fraud or worker misclassification, we will advocate on your behalf. Please contact our council office by calling 504-305-4737. https://www.centralsouthcarpenters.org
Want to keep reading about Tax Fraud? Check out the links below:
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