Government agencies rely on tax revenue to provide essential services like public education and infrastructure such as roads and bridges. Construction workers and their families suffer from tax fraud, too. Here’s how:
- Workers misclassified as independent contractors are responsible for paying an additional $76.50 in taxes for every $1,000 in taxable income each year.
- Misclassified workers and those paid off the books are not covered by a workers’ compensation policy if they are injured on the job. This means they could be left holding a big medical bill.
- These workers are not eligible for employer-provided health, retirement, and other benefits.
- Contractors don’t report these workers’ wages to the Social Security Administration. This reduces or disqualifies them from Social Security benefits in retirement.
- If they are fired, they do not receive unemployment benefits, and they can’t get help from government agencies to recover unpaid wages.
- Because employees working in the U.S. under visa programs often are ill-equipped to stand up to contractors who fail to pay fair wages or overtime, these practices are unfortunately common.
Answer the questions below to learn whether construction tax fraud might be happening in your community.