By Douglas J. McCarron
General President
United Brotherhood of Carpenters and Joiners of America

In a few weeks, thousands of Carpenters Union members will stand up and demand an end to construction employer tax fraud and worker abuse.

By taking part in Tax Fraud Days of Action, April 13–19, members of UBC councils throughout the U.S. and Canada will again raise their voices against employers who are motivated by greed and guided by the fraud playbook.

The crooked business practices perpetrated by these bad-actor employers devastate workers who are trying to make a decent living for their families, harm legitimate contractors who are struggling to compete and deprive tax revenue from federal, state and local treasuries.

A few months ago, a new national study gave us fresh evidence of the toll that tax fraud takes. Using conservative estimates, the study found:

Up to 2.1 million construction workers, or 19 percent, are misclassified as independent contractors or paid off the books.

Workers suffer $1.9 billion in overtime wage theft.

Workers’ compensation insurers lose $5 billion to employer premium fraud.

State and federal tax losses amount to $10 billion a year.

Working families suffer a $5.1 billion tax increase because crooked employers shift their own responsibility to pay employment taxes onto their workers’ backs.

Those who are caught committing fraud often claim they made a mistake. Some say the other guy is the problem. Don’t believe it.

We’re in crisis mode with a systemic problem that involves every size and type of construction jobsite, from military bases to malls, from convention centers to condominiums.

And employers at every level are involved, from the smallest subcontractors and labor brokers to the largest developers and construction company owners. They all know it’s happening, and those at the top levels often look the other way when their subcontractors fail to pay workers properly, or otherwise cheat the system.

Employer fraud is a cancer that has become a business model and we’ve learned that eradicating the cancer is not easy. But we’re not backing down.

Tax Fraud Days of Action is our annual campaign to bring attention to the crisis, but we fight fraud every day of the year.

We’re fighting in state legislatures. Last year, Minnesota and Hawaii became the latest states to pass laws making upper-tier contractors liable for wrongdoing by the subcontractors they hire. Seven other states and the District of Columbia already have these laws on the books, and they are helping to make better law enforcement possible. We need more states to follow suit.

We work with city and county officials, district attorneys and other officials to tighten enforcement at all levels, and we’re seeing lawbreakers brought to justice.

And we’re educating the business community about employer tax fraud. UBC council leaders have been meeting with bankers to sensitize them to the crisis and remind them of their obligations to uphold lawful conduct.

We’re encouraged by a recent notice issued by the U.S. Department of the Treasury’s Financial Fraud Enforcement Network (“FinCEN”), which requires banks and other financial institutions to report the suspicious transactions of their construction account holders.

All these efforts are helping but what will help the most is for employers to leave the fraud business model behind. Contractors can do this by insisting that their subcontractors abide by the law. They can demand proof of compliance and ask potential subcontractors how they plan to pay their employees. They can make sure their jobsites operate safely.

There is plenty of work in construction for the next several years, and plenty of workers who want to build a good career in the industry—as long as they can earn a decent wage with benefits and be treated with the dignity they deserve.

I hope you will join us during Tax Fraud Days of Action, April 13–19.

To learn more, go to StopTaxFraud.net/StandUp.