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HOME — FACTS — TABLES — VIDEOS — INFOGRAPHICS — AGENCIES — RESEARCH <br />Ormiston, Russell; Dale Belman; and Mark Erlich. (2020). An Empirical Methodology to Estimate the <br />Incidence and Costs of Payroll Fraud in the Construction Industry. Allegheny College; Michigan State <br />University; Harvard University. <br />Kev Finding: In the average month in 2017, between 12% and 21% of construction industry workers were misclassified as <br />independent contractors or working strictly off -the -books. Due to payroll fraud, state workers' compensations programs <br />experienced a $1.7 billion shortfall due to misclassification. State unemployment insurance plans experienced a shortfall <br />of up to $725 million. State income tax revenues are $552 million lower. As much as $4.3 billion owed to Social Security <br />and Medicare and $1.3 billion in federal income taxes was never paid in 2017 due to payroll fraud. <br />Greenstein, Robert. (2018). Health Coverage Progress Stalls — Even as Economy Reduces Poverty, Boosts <br />Income. Center on Budget and Policy Priorities. <br />Kev Finding: While poverty rates fell and median income rose in 2017, health insurance coverage did not increase <br />nationally. 8.8% of the U.S. population, 28.5 million people, were not covered by health insurance in 2017, mostly being <br />low wage working adults and their dependents. <br />Yen Liu, Yvonne; Daniel Flaming; and Patrick Burns. (2014). Sinking Underground: The Growing Informal <br />Economy in California Construction. Economic Roundtable. <br />Kev Finding: An analysis of California's construction industry found that 16% of construction workers were employed in <br />the informal economy in 2011, including 104,100 construction workers who were not reported by their employers and <br />39,800 who were misclassified as independent contractors. The "informal tax gap" results in $774 million in lost revenue <br />from payroll taxes alone—$301 million to the federal government and $473 million to California. <br />Canak, William and Randall Adams. (2010). Misclassified Construction Employees in Tennessee. Middle <br />Tennessee State University; Tennessee Technical University. <br />Kev Finding: Between 12,000 and 39,000 construction workers are misclassified or unreported, affecting 11% to 21% of <br />the construction workforce. Losses to state and federal programs were up to $15 million for the state's UI program, $92 <br />million in worker's compensation premiums, $73 million in federal income tax, and $42 million in Social Security funding. <br />Belman, Dale and Richard Block. (2009). The Social and Economic Costs of Employee Misclassification in <br />Michigan. Michigan State University. <br />Kev Finding: 26% of construction firms misclassified employees. Among those who did so, 19% of their employees were <br />misclassified (i.e., 6% of the entire industry workforce), costing the state over $2 million in UI tax revenue. <br />Sonn, Paul and Tsedeye Gebreselassie. (2009). The Road to Responsible Contracting: Lessons from States <br />and Cities for Ensuring That Federal Contracting Delivers Good Jobs and Quality Services. National <br />Employment Law Project (NELP); University of California, Berkeley. <br />Kev Finding: A 1983 Housing and Urban Development audit found an inverse relationship between wage violations and <br />quality of projects for federally -funded construction. <br />Cox, Lauren; Emily Timm; and Cristina Tzintzun. ( ). Building Austin, Building Injustice. Workers <br />Defense Project; The University of Texas at Austin. <br />Key Finding: Access to workers' compensation is one aspect of total compensation and benefits and is especially valuable <br />in injury -prone industries such as construction. 20% of construction workers in Austin who experienced an injury were not <br />able to take advantage of workers' compensation due to their status as independent contractors. This cost was largely <br />absorbed by public hospitals caring for the injured workers. <br />Theodore, Nil< and Marc Doussard. ( ). The Hidden Public Cost of Low -Wage Work in Illinois. University <br />of Illinois at Chicago. <br />Kev Finding: Low -wage jobs in 2001-2004 caused working families to rely on government assistance programs. These <br />families constituted 37% of public benefits spending in Illinois, including $92 million on families with construction workers. <br />14 <br />