Dive Brief:
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The practice of “wage theft”—paying laborers less than their promised wages, in cash—“has reached epidemic levels” in Massachusetts, according to the University of Massachusetts Amherst.
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Case in point: The U.S. Attorney’s Office last week charged a Woburn, MA, asbestos abatement and construction company with making off-the books cash payments to workers for three years in order to avoid paying employment taxes and offering union benefits. The Boston Globe reported on Tuesday that the state attorney general’s office has made more than 253 claims against construction employers in 18 months and has recovered more than $1.6 million in back pay and fines.
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The Massachusetts Legislature is considering a bill that could hold general contractors responsible for wage violations by their subcontractors. The Globe reported that the problem is most prevalent among subcontractors who hire immigrants and deliberately misclassify them as independent contractors.
Dive Insight:
Tom Juravich, the UMass Amherst paper’s lead author, said “the great majority” of the state’s subcontractors use undocumented workers and “cheat them out of wages.” The state chapter of the Associated Builders and Contractors told The Globe, however, that most firms pay and treat their workers fairly.
The problem is not confined to Massachusetts. In a lengthy series last fall, The McClatchy Company uncovered the widespread practice in the construction industry of misclassifying employees as independent contractors to avoid filing payroll taxes, paying unemployment tax and providing workers’ compensation.
The problem, the journalists revealed, is most prevalent in Southern states with fewer unions and an abundance of immigrant labor.