What is Tax Fraud?
Construction Industry Tax Fraud is personal. The harm from greedy contractors and labor brokers trickles down to vulnerable families, local workers, and the programs and infrastructure we all rely on.
Wage Theft
Wage theft happens when workers aren’t paid all or a part of the wages they earned. Another form of wage theft is not paying the legally mandated time-and-a-half overtime premium for hours worked in excess of 40 hours in a week.
Misclassification
Misclassification is when a worker is wrongfully labeled as an independent contractor by their employer. This affects the employees opportunity for fair pay, benefits, and workers’ compensations.
Payroll Fraud
Payroll fraud happens when an employer doesn’t pay a worker money they earned, underpaying wages, or not paying overtime.
Wage Theft is Extraordinarily Common
In fiscal year 2025 alone, federal investigators recovered more than $259 million in back wages for nearly 177,000 workers, and those numbers capture only the fraction of cases that reach the Department of Labor.
How Worker Misclassification Harms Employees
EPI estimates that a typical construction worker misclassified as an independent contractor loses up to $19,526 per year in wages, benefits, and employer-paid taxes.
Spotlight Washington DC:
Residents Pay, Underground Economy Profits