The prevalence of construction industry tax fraud has reached crisis levels. A recent study shows that 23 percent of Minnesota’s construction industry employees fall victim to payroll fraud. The North Central States Regional Council of Carpenters (NCSRCC) works with industry and state officials to bring the ramifications of payroll fraud to light and bring down those who perpetuate it.
From April 14-17, NCSRCC will hold Tax Fraud Days of Action (TFDOA) events across Minnesota to raise awareness about construction industry tax fraud and demand that government and law enforcement officials act.
TFDOA grew out of widespread outrage over construction industry tax fraud where employers evade their tax responsibilities in several ways, including intentionally misclassifying workers as independent contractors, paying off the books, not paying workers’ compensation insurance, or wage theft. These employers do not withhold taxes or offer basic workplace protections, and their workers earn an average of 29-36 percent less in total compensation, including fringe benefits, than their properly documented peers.
Tax fraud costs Minnesota taxpayers $136 million in unpaid state income taxes, unemployment insurance contributions, and workers’ compensation premiums annually. By neglecting to address the crisis, we are harming our communities and future generations. I urge elected officials to closely review construction contractors and their practices before awarding work that perpetuates these criminal business practices.
John Raines is the executive secretary-treasurer of NCSRCC.
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