Members of the Mid-America Carpenters Regional Council staged demonstrations at more than 50 public buildings throughout Illinois, Missouri, Kansas and Iowa last week to highlight tax fraud in the construction industry.
The union members also sent 400 emails to prosecuting attorneys in those regions to raise awareness about contractors who misclassify workers or pay them off the books, according to union officials.
“Construction industry tax fraud affects every man, woman and child,” said Kevin McLaughlin, executive secretary-treasurer of the Mid-America Carpenters Regional Council. “Every time an unscrupulous contractor cheats the system and doesn’t pay what they owe, that means less money in the public coffers for education, public safety, healthcare and other essential services.”
Economic impact
A study by the Century Foundation found that 2.1 million construction workers are paid off the books or misclassified as independent contractors, costing U.S. taxpayers more than $10 billion annually, union representatives said.
The union, which represents more than 53,000 members, alleges that some subcontractors and labor brokers are hired specifically to underbid law-abiding businesses by avoiding tax obligations.
Worker hardship
The practice has significant effects on construction workers and their families. Research from the University of California Berkeley Labor Center found that 39 percent of construction worker families nationwide must enroll in at least one safety net program to make ends meet, according to the union.
The problem has grown serious enough that the U.S. Department of the Treasury’s Financial Crimes Enforcement Network has advised financial institutions to report suspicious transactions from construction contractors.
The union is calling on elected officials at all levels of government to increase enforcement against tax fraud in the construction industry.
