By John Stautner, Founder, ConstructionCitizen.com
The widespread practice of misclassification of workers as independent contractors has a detrimental effect on immigrants, workforce, competitiveness in the industry, and tax revenues. One study estimates that between 12.4 and 20.5 percent of construction workers are either misclassified or are paid “off the books,” and others suggest the number is even higher.
When a company hires workers as independent contractors who should lawfully be classified as employees per DOL-specified criteria, unauthorized immigrants work in the shadows, without safety training, workers compensation, company benefits, or craft training. When they get hurt on the job, often their only option is getting dumped at the hospital emergency room at taxpayer expense. Employers that misclassify their workers as independent contractors get an unfair advantage over workers, avoid paying employment taxes, and get an unfair advantage over law-abiding competitors. The consequence is reduced tax contributions and depressed wages and standards.
ID & Tax legislation, covered on TexasGOPVote.com, would create a method for long-time unauthorized immigrants who can pass background checks to legally work for employers who deduct and match taxes. This, combined with enforcement of labor laws for proper classification, would provide a legal, safer, and more productive way for immigrants to work for employers who take the same care of them as their other properly classified employees.
An ID & Tax policy would also be an important step to addressing our U.S. workforce needs and would level the playing field for law-abiding employers and employees who play by the rules and pay their fair share of taxes. The result is increased tax revenues, higher wages, improved standards, and strategically focused enforcement.
ConstructionCitizen.com continues to serve as a construction industry resource and reference for news and education on the issue of misclassification (often referred to as payroll fraud). We share a mission with industry leaders to advance a socially responsible, sustainable, value-added construction industry, one that attracts, values, and takes care of its workforce.
Photo credit: “Construction workers” by astrid westvang, CC BY-NC-ND 2.0
