Up to 2.1 Million U.S. Construction Workers Are Illegally Misclassified or Paid Off the Books

From The Century Foundation, Laura Valle Gutierrez,Russ OrmistonDale L. Belman, and Jody Calemine report htat millions of consruction workers are misclassified as independent contractors and cost taxpayers billions. Laura, Russ, Dale and Jody write:

This report finds that, nationally, 1.1 to 2.1 million construction workers are estimated to be misclassified or paid off-the-books, and there are reasons to believe this may undercount the true extent of the problem. These workers lose key legal rights when employers misclassify them or pay them off the books. Moreover, misclassification and off-the-books payments have significant costs to individual workers through lost worker’s compensation insurance, unemployment insurance (UI), and lost overtime pay. State and federal government social insurance programs also rely on employer taxes for funding. By misclassifying workers or paying them off the books, employers avoid paying their share of taxes to programs such as Social Security and unemployment insurance. This report estimates that unscrupulous employers in the construction industry that misclassify or resort to off-the-books payments are underpaying workers and shortchanging payments toward legally required benefits (such as Social Security, unemployment insurance, and workers’ compensation) by over $12 billion per year, costing taxpayers between $5 and $10 billion per year.

Read the full report at Up to 2.1 Million U.S. Construction Workers Are Illegally Misclassified or Paid Off the Books

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