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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They Do It Because They Know They Can Get Away With It

By Carl Neimeyer
Founder and President
Bernward Mechanical and Construction Solutions
Severna Park, Md.

A company that cannot turn a profit of at least a few percentage points is a failing company with no future. I have built and grown my business from the ground up, and, through the last five years, we have had our biggest struggles on the carpentry side, especially when competing on sites that are not prevailing wage jobs.

We are trying to compete with companies that can turn a profit while still being the lowest bidder on the backs of their workers, undercutting their wages and exploiting gaps in the law and shortcomings in enforcement. When a company proposes to do a job that could barely cover the just costs of labor that they deserve for their skills, before you even touch materials and overhead, you want to ask, “What are you doing?”

Unfortunately, when you’ve been around this industry a while, you know exactly what they’re doing. A company like that can get those numbers by undercutting labor—often using dubious brokers who exploit immigrant workers because they know they can get away with it.

Highroad companies like mine that refuse to engage in these unethical practices often lose work. We just can’t compete with their artificially low numbers.

The dirty underbelly of the construction industry, I’ll admit, wasn’t something I was fully prepared for. I worked with a family-friendly residential contractor prior to earning my mechanical engineering degree and commissioning in the U.S. Navy’s Civil Engineer Corps (Seabees). My whole experience as a teenager and in my military career was construction that was ethical and highly regimented.

However, after getting out of the Navy, I worked for a small company. While I was eager to take on the challenges of the struggling company, I couldn’t abide some of the “tricks of the trade” that I was told to be part of, like using layers and layers of 1099 contractors to avoid paying for labor.

I’m deeply rooted in my Catholic faith and ethics—I want everything done properly and fairly. I realized that if I wanted to be part of a company that operates that way and have the life I wanted for my family, I needed to start my own. I wanted to offer good jobs where trained, qualified workers are valued, treated fairly and compensated well with health care and retirement. For our business model, that means working union.

It’s surprising that in Maryland, there are not a lot of labor regulations or standards enforced in this industry. You can become a commercial contractor by paying only $17. Enforcement isn’t prioritized. There are few checks and incentives that would discourage the kinds of undercutting and abuse of labor that I’ve seen. They do it because they know they can get away with it.

We need skilled labor. We need to change things so skilled labor is treated as the valuable, dignified, necessary work that it is. That’s one of the reasons I’ve decided to run for county council.