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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Events Highlight Gains in the Fight Against Tax Fraud

With many voices and one vision, Carpenters Union members and supporters came together across the U.S. and Canada to participate in more than 100 events during Tax Fraud Days of Action, April 14 – 17. 

Regional councils of the United Brotherhood of Carpenters and Joiners of America (UBC) held events either virtually or in-person, in accordance with local COVID-19 protocols.

The goal of the Tax Fraud Days of Action campaign is to expose and eliminate the many fraudulent practices among cheating construction industry players that have exploited and abused countless workers, decimated the businesses of legitimate contractors and stolen funds from local, state and federal taxpayers. This includes passing legislation to hold top-tier contractors responsible and increasing enforcement efforts to catch and punish those who are breaking laws already on the books.

In 2020 an authoritative study found that as much as 20 percent of the construction workforce, or 2.41 million construction workers, are illegally paid off the books or misclassified as independent contractors.  Using mid-range estimates, the federal and state tax losses are $8.4 billion a year.

This year’s Tax Fraud Days of Action events and accomplishments included:

Michigan—At a Facebook-Live event sponsored by the Michigan Regional Council of Carpenters, Governor Gretchen Whitmer announced that bidders on state contracts will be required to disclose their labor and environmental compliance record and certify that bidders have been properly classifying workers as employees.

California—At a press conference organized by the Southwest Regional Council of Carpenters, San Diego County DA Summer Stephan announced that her office’s Workplace Justice Unit has established a website for complaints.  San Diego County Supervisor Nathan Fletcher announced his intention to form a county office of labor standards and pledged to work with the county DA.

Southern States—Attorneys general from 11 states received letters from the Southern States Millwright Regional Council with details on tax fraud, visa and worker abuse by contractors.

Louisiana—Governor John Bel Edwards took part in a webinar hosted by the Central South Carpenters Regional Council and voiced support for amending Louisiana’s anti-misclassification law to allow penalties for first-time offenders. The webinar was attended by numerous local officials and employers and included testimonials from a former labor broker and an exploited worker.

Pennsylvania—At a virtual conference hosted by the Eastern Atlantic States Regional Council of Carpenters, State Attorney General Josh Shapiro announced that his office is prosecuting the largest criminal prevailing wage theft case in U.S. history against Glenn O. Hawbaker. The event included panels with Pennsylvania, New Jersey and Virginia officials. In Pittsburgh, Mayor Bill Peduto signed an executive order to promote legitimate business practices and crack down on cheaters.

Connecticut—Attorney General William Tong spoke at a rally organized by the North Atlantic States Regional Council of Carpenters in support of council-backed legislation that will allow him to bring unfair contractors to justice.

Kentucky and Ohio—Representatives of the Indiana-Kentucky-Ohio Regional Council of Carpenters received bipartisan support for the effort to combat fraud in videotaped interviews with state lawmakers.

Illinois—The Chicago Regional Council of Carpenters hosted a Facebook-Live event that reached 7,500 viewers, with participation from numerous state officials and members of Congress. The Mayor of Aurora, Richard Irvin, announced a city resolution thanking the council for shedding light on tax fraud and pledged to work only with contractors who play by the rules. Illinois House Speaker Emanuel “Chris” Welch and Senate President Don Hamon, who joined the event, announced support for legislation to make upper-tier contractors liable for wage theft by any of their subcontractors. Also joining was Attorney General Kwame Raoul, who has established a worker protection unit in the AG’s office.

Pacific Northwest—The Pacific Northwest Regional Council of Carpenters launched an in-depth new series from the council’s Grit podcast called Stolen: Stories of Wage Theft and Tax Fraud in the Construction Industry. The first episode is available here.

Across Canada—Carpenters Union regional councils continued their extensive Tax Fraud education campaigns, holding numerous meetings and information sessions with local, provincial and federal representatives and ministers.  District Vice President Jason Rowe met with the Parliamentary Secretary to the Minister of National Revenue, who agreed to request that a carpenter representative be seated on the federal Advisory Committee on the Underground Economy and designate a fraud auditor to work with the UBC.

Throughout the U.S. and Canada, hundreds of members participated by attending events and holding banners at worksites and in public areas. In several regions, council representatives drove media trucks in public areas to publicize the campaign.

A sampling of media coverage includes news items and opinion pieces in outlets including the Calgary Herald/Edmonton Journal (Alberta); WSILTV.com (Springfield, IL); Trib Live (Pittsburgh); Detroit Free Press, Detroit News and numerous Michigan media outlets; Times Herald Record (Hudson Valley, NY); News10 TV (Syracuse); Metro Daily News (Framingham, MA); Post Bulletin (Rochester, MN); Omaha Daily Record (Neb.); KUSI TV (San Diego); Telemundo 20 (San Diego); Univision (San Diego); National Post (Toronto); New Haven Register (Conn.)

“We thank our members and everyone who came together to fight against tax fraud,” said UBC General President Doug McCarron.

“When it comes to construction industry tax fraud, everyone is a victim—except the cheating contractors who are willing to poison the industry to grab excessive profits,” McCarron said.  “We will not stop our efforts until tax fraud and worker abuse in construction is eliminated.”