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HOME — FACTS — TABLES — VIDEOS — INFOGRAPHICS — AGENCIES — RESEARCH
<br />Sources Listed by Release Year
<br />Schmitt, John; Heidi Shierholz; Margaret Poydock; and Samantha Sanders. (2023). The Economic Costs of
<br />Worker Misclassification. Economic Policy Institute.
<br />Kev Finding: When employers misclassify workers as independent contractors, they deprive them of fundamental labor
<br />rights. In construction, an independent contractor loses out on as much as $16,729 per year in income (32%) from being
<br />misclassified as an independent contractor compared with what they would have earned as an employee. Revenue for
<br />social insurance programs —Social Security, Medicare, Workers' Compensation, and federal and state unemployment
<br />insurance —decreases by as much as $2,965 per construction worker per year due to misclassification as well (32%).
<br />Hacker, Chris; Ash-Har Quraishi; Amy Corral; Ryan Beard. ( ). "Wage Theft Often Goes Unpunished
<br />Despite State Systems Meant to Combat It." CBS News.
<br />Kev Finding: Even when wage theft is reported, employers often manage to avoid paying back the wages they owe. CBS
<br />News submitted public records requests to nearly every state labor department in the country and built a database of
<br />more than 650,000 total complaints. Of those cases, state agencies ruled in favor of claimants only about half of the time.
<br />Even when workers won their claims, more than a third of those successful cases —totaling nearly $1 billion —showed no
<br />money was ever recovered. Finally, if wage theft was treated the same as felony theft (or the threshold at which a
<br />misdemeanor street crime becomes a felony), 177,000 wage theft cases in 25 states could have been felony cases. This
<br />includes over 25% of cases in New Jersey, Illinois, Massachusetts, New Hampshire, Kentucky, Indiana, Maryland, New York,
<br />Maine, Montana, Minnesota, Kansas, Utah, and Michigan.
<br />Ormiston, Russell and Tom Juravich. (2022). Worker Misclassification and Wage Theft in Rhode Island.
<br />Allegheny College; University of Massachusetts -Amherst; Institute for Construction Employment Research
<br />(ICERES).
<br />Kev Finding: Rhode Island employers misclassified 4% of the state's workforce in 2019, representing more than 19,000
<br />workers. In construction, 12% of construction employers are misclassifying workers, affecting 8% of the industry
<br />workforce. Payroll fraud costs taxpayers between $25 million and $54 million annually.
<br />Waddoups, Jeffrey; Kevin Duncan; and Russell Ormiston. (2021). Payroll Fraud in Nevada's Construction
<br />Industry: Extent and Fiscal Impact. University of Nevada, Las Vegas; Colorado State University -Pueblo;
<br />Allegheny College; Institute for Construction Employment Research (ICERES).
<br />Kev Finding: There were about 12,700 workers who were either misclassified as independent contractors or employed off -
<br />the -books in Nevada's construction industry in 2018, representing 11% of the industry and 14% of blue-collar construction
<br />workforce. This resulted in $31 million in unpaid workers' comp premiums, a $12 million shortfall in the state Ul fund, and
<br />$7 million in uncollected tax revenue via the Modified Business Tax.
<br />Juravich, Tom; Russell Ormiston; and Dale Belman. (2021). The Social and Economic Costs of Illegal
<br />Misclassification, Wage Theft, and Tax Fraud in Residential Construction in Massachusetts. University of
<br />Massachusetts -Amherst; Allegheny College; Michigan State University; Institute for Construction
<br />Employment Research (ICERES).
<br />Kev Finding: Audits of employer payrolls from 2017 to 2019 indicate that more than one -in -six Massachusetts construction
<br />employers (17% to 18%) misclassify their workers as independent contractors. Utilizing a well -established empirical
<br />approach of indirectly estimating the full extent of misclassification, there were between 22,000 and 37,000 workers
<br />affected by wage and tax fraud in 2019, accounting for 9% to 16% of the industry's workforce. This was especially prevalent
<br />among building finishing contractors (e.g., drywall, finish carpentry, painting). This led to $41 million in lost unemployment
<br />insurance contributions $41 million in lost income taxes, and $78 million in lost workers' comp premiums in 2019.
<br />Jacobs, Ken and Kuochih Huang. (2021). The Public Cost of Low -Wage Jobs in California's Construction
<br />Industry. University of California, Berkeley.
<br />Kev Finding: 48% of families in which at least one adult who works in construction are enrolled in public safety net programs
<br />such as Medicaid, CHIP, EITC, and SNAP at an estimated annual cost of $3 billion.
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