Agenda - Council Work Session - 07/28/2026

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HOME - FACTS - TABLES - VIDEOS - INFOGRAPHICS - AGENCIES - RESEARCH Mangundayao, Ihna; Celine McNicholas; Margaret Poydock; and Ali Sait. (2021). More Than $3 Billion in Stolen Wages Recovered for Workers Between 2017 and 2020. Economic Policy Institute. Kev Findine: Between 2017 and 2020, $3.24 billion in stolen wages was recovered on behalf of workers by the U.S. Department of Labor, state departments of labor and attorneys general, and through class and collective action litigation — but this represents just a small portion of wages stolen from workers across the country. Potential policy options include increasing funding for the Department of Labor's Wage and Hour Division, engaging in proactive and strategic enforcement in industries where violations are especially rampant, enhancing civil monetary penalties for violations, protecting worker rights to unionize, and boosting funding for state and local enforcement. Ormiston, Russell; Mark Erlich; and Dale Belman. (2021). Payroll Fraud in New York's Construction Industry: Estimating its Prevalence, Severity and Economic Costs. Allegheny College; Harvard University; Michigan State University; Institute for Construction Employment Research (ICERES). Kev Findine: There were between 76,000 and 126,000 workers who were either misclassified as independent contractors or employed off -the -books in New York's construction industry in 2017, representing 13% to 21% of all construction workers. This resulted in $289 million in unpaid workers' comp premiums and a $49 million shortfall in the state UI fund. Goodell, Nathaniel and Frank Manzo IV. (2021). The Costs of Wage Theft and Payroll Fraud in the Construction Industries of Wisconsin, Minnesota, and Illinois: Impacts on Workers and Taxpayers. Midwest Economic Policy Institute. Kev Findine: When compared to employees doing similar work, independent contractors earn about 30% in total compensation in the construction industries of Wisconsin, Minnesota, and Illinois. This includes 13%-22% less in annual wages and 62%-66% in total benefits. Wage theft and payroll fraud cost a total of $362 million in lost state income taxes, unemployment insurance contributions, and workers' compensation premiums in these three states every year. Ormiston, Russell; Dale Belman; and Mark Erlich. (2020). An Empirical Methodology to Estimate the Incidence and Costs of Payroll Fraud in the Construction Industry. Allegheny College; Michigan State University; Harvard University. Kev Finding: In the average month in 2017, between 12% and 21% of construction industry workers were misclassified as independent contractors or working off -the -books. Due to payroll fraud, contractors illegally reduce labor costs by $6.2 billion to $11.7 billion per year. State workers' comp programs experienced a $1.7 billion shortfall due to misclassification. State UI plans experienced a shortfall of up to $725 million. State income tax revenues are $552 million lower. As much as $4.3 billion owed to Social Security and Medicare and $1.3 billion in federal income taxes was never paid in 2017 due to payroll fraud. Under federal wage statutes, workers are entitled to time -and -a -half for hours worked over 40 hours per week and to premium pay for work over holidays. Employers who misclassify workers as independent contractors can avoid paying these additional wages, resulting in $811 million to $1 billion in unpaid overtime and premium wages. McNicholas, Celine; Zane Mokhiber; and Adam Chalkof. (2017). Two Billion Dollars in Stolen Wages Were Recovered for Workers in 2015 and 2016— and That's Just a Drop in the Bucket. Economic Policy Institute. Kev Finding: In 2015 and 2016, $2 billion in stolen wages were repaid to victims of wage theft through litigation, state agency action, and class-action lawsuits. This figure is likely well below the amount actually stolen by wage theft yearly. Cho, Eunice Hyunhye; Tia Koonse; and Anthony Mischel. ( ,' ). Hollow Victories: The Crisis in Collecting Unpaid Wages for California's Workers. National Employment Law Project; University of California, Los Angeles. Kev Finding: Only 42% of unpaid wages due to wage theft were recovered after being awarded to victims by the California Department of Labor Standards Enforcement. The low chances of repayment combined with the exhaustive litigative process dissuades many from filing claims of wage theft. Canak, William and Randall Adams. (2010). Misclassified Construction Employees in Tennessee. Middle Tennessee State University; Tennessee Technical University. Kev Finding: Between 12,000 and 39,000 construction workers are misclassified or unreported, affecting 11% to 21% of the construction workforce. Losses to state and federal programs were up to $15 million for the state's UI program, $92 million in worker's compensation premiums, $73 million in federal income tax, and $42 million in Social Security funding. 10