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<br />Wage Theft is a Crime Against Construction Workers
<br />Worker misclassification allows employers to avoid paying market -competitive wages and to bypass labor
<br />standards. This includes Davis -Bacon prevailing wage rates on federal projects, state prevailing wage laws,
<br />and federal and state minimum wage laws. Workers classified as independent contractors earn less in
<br />comparison to workers classified as employees doing similar work. Nationally, construction workers who
<br />are misclassified as independent contractors earn as much as $16,700 less per year, or 32% less, in income
<br />compared to what they would have earned as employees (Schmitt et al., 2023). Similarly, in Illinois,
<br />Wisconsin, and Minnesota, misclassified construction workers earned between 29% and 36% less than
<br />their properly classified co-workers in total wages and fringe benefits. The effect is staggering:
<br />misclassified construction workers were paid between $23,000 and $26,000 less in total annual
<br />compensation than they would have been paid if they were properly classified (Goodell & Manzo, 2021).
<br />Misclassification harms workers by depriving them of benefits, such as overtime pay, workers'
<br />compensation, unemployment insurance, and paid leave. Nationwide, researchers estimate that between
<br />$811 million and $1 billion in owed overtime and premium pay goes unpaid to misclassified construction
<br />workers (Ormiston, Belman, & Erlich, 2020). State -level studies in Missouri, Rhode Island, Nevada,
<br />Massachusetts, New York, Tennessee, and Michigan confirm that misclassification deprives workers of
<br />these vital benefits (Kelsay, 2023; Ormiston & Juravich, 2022; Waddoups, Duncan, & Ormiston, 2021;
<br />Juravich, Ormiston, & Belman, 2021; Ormiston, Erlich, & Belman, 2021; Canak & Adams, 2010; Belman &
<br />Block, 2009). Estimates from the construction industries in Illinois, Wisconsin, and Minnesota indicate that
<br />misclassified workers experience a 62%to 66% decline in their non -monetary benefits (Goodell & Manzo,
<br />2021). In a case study of the Austin, Texas construction industry, around 71% of poverty -wage workers
<br />had no access to workers' compensation coverage due to misclassification (Cox, Timm, & Tzintzun, 2009).
<br />When workers' compensation systems are underfunded due to the underground market, the premiums
<br />paid by law-abiding businesses must go up to make up the deficit, which can result in lower worker wages
<br />in the legal market as employers pay less to compensate for their increase in premiums (Goh, 2004).
<br />Independent contractors are also not offered employer -sponsored health insurance plans. Even federally -
<br />funded jobs have not always provided benefits equally, with almost 20% of independent contractors
<br />unable to earn a living wage and without access to employer -sponsored health care coverage (Edwards &
<br />Filion, 2009). As a result, a large portion of construction workers and their families are dependent upon
<br />social safety net programs (Jacobs & Huang, 2021; Theodore & Doussard, 2006).
<br />There are avenues for recovery for workers victimized by the crime of wage theft. State agencies may
<br />order unpaid wages be paid; however, unscrupulous employers are likely to avoid paying even after
<br />litigation. Research from California indicates that only 42% of stolen wages are recovered by victims of
<br />wage theft. Even worse, just 17% of workers who prevailed in a wage theft claim in California recovered
<br />any wages at all (Cho, Koonse, & Mischel, 2013). Similarly, a CBS News investigation of 650,000 complaints
<br />across the United States found that state agencies only ruled in favor of claimants about half the time —
<br />and claimants are not compensated in one-third of successful cases (Hacker et al., 2023). Despite these
<br />challenges, workers nationwide were able to recover $5.2 billion through the U.S. Department of Labor,
<br />state agencies, and class action lawsuits from 2015 through 2020 (McNicholas, Mokhiber, & Chalkof, 2017;
<br />Mangundayao et al., 2021).
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