The U.S. Department of Labor has ordered three large Utah contractors to pay back wages and damages to more than 1,000 former employees.
After a five-year investigation, DOL said the construction firms—CSG Workforce Partners, Universal Contracting, Arizona CLA, and a number of smaller entities—illegally classified workers in Utah and Arizona as owners of limited liability companies. The misclassification allowed the contractors to get out of paying hundreds of thousands of dollars in payroll taxes.
The ruling calls for the businesses to pay approximately $600,000 in back wages to the employees and assesses a $100,000 civil fine.
The federal government has been cracking down on the widespread practice in the construction industry of misclassifying employees as independent contractors in an effort to avoid paying payroll and unemployment taxes and workers’ compensation.
The practice was widely publicized when journalists at The McClatchy Company published a year-long investigation last year about the practice and pointed to lax enforcement by the federal government.