The Losses Keep Mounting

More than $8.4 billion a year is lost to Construction Industry Tax Fraud! Watch the losses climb, from Jan. 1, 2017 to now. 

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Workers in Tears, Pleading to be Paid

When you are a foreman you expect to help your crew produce high-quality work with efficiency and skill. You don’t expect to be forced to lie to your co-workers or to have them calling you crying, begging to be paid.

That was the situation Juan found himself in last year. (Juan asked that we not publish his last name for this blog.) Juan had worked for 12 years for a drywall contractor out of New Paltz, New York.

Juan is originally from Ecuador, where he had training in civil engineering.  He was one of the New York company’s longest-serving employees. He eventually became a general foreman and supervised workers.

Juan received weekly paychecks with pay stubs that showed deductions for income taxes and Social Security. He earned $32.50 per hour but did not receive pension, health or other benefits.  For union workers in the New York suburbs, the pay rate reached nearly $77 an hour, which includes benefits.

Even compared to Juan’s substandard pay, it was much worse for the employees that Juan supervised. They were paid by personal check and deductions were not taken. Wages were $15 to $20 per hour—and often the “paychecks” bounced.  At the end of the year these workers received 1099 forms as contract workers. But they functioned as company employees because they took direction from company supervisors and the company set hours and supplied materials. This is the very definition of worker misclassification.

In late 2018 things became even worse for Juan and the contractor’s workers at a residential tower project in New Rochelle. For nearly two months, workers received no pay at all—the checks just stopped. Juan was expected to keep his crews on the job while promising them checks that never came.

“I felt very bad lying to the workers,” Juan said. “They would call me, crying, pleading for their pay and asking for help with transportation to work, and lunch.”

During this time, Juan was also running work at three other sites—in Yonkers, Long Island City and Coney Island—supervising a total of about 200 workers.

The crisis at the New Rochelle job continued right through the holidays. One of the worst moments was when the company owner posted a photo online of his bountiful table on Thanksgiving. He took down the photo after getting a lot of heat from his workers, Juan said.

After a few weeks without pay, several of the contractor’s workers contacted representatives of the North Atlantic States Regional Council of Carpenters (NASRCC), who documented their stories and helped to verify the payroll issues. The council representatives provided Spanish translation and offered to meet with any of the workers who requested help.

Soon after, Juan came to Local 279 in Hopewell Junction, N.Y. While meeting with him, union representatives noticed that his phone rang about 40 times in an hour and Juan seemed overwhelmed with stress.  The reps learned later that the calls were from workers, looking for their pay.

Juan and several other of the contractor’s workers joined the union and are now working for signatory contractors. “Before I came to the union I only thought about work,” Juan said. “I couldn’t think about the future; I had nothing. I have three kids, they’re age 14, 11 and 8, and now I’ve been able to buy a home.”

 The contractor Juan worked for was eventually thrown off the New Rochelle job. In July of 2019, Juan and several former workers joined together to file a lawsuit against the company owners.

Talking about his ordeal, Juan said, “I feel sad just remembering.”