EDITORIAL: End ‘independent contractor’ tax dodge by construction companies

Insurance News

From insurancenewsnet.com — “Going forward, though, a couple of corrective actions seem appropriate at the federal level and for states:

First, federal and state agencies should stop accepting certified payrolls from contractors who don’t withhold taxes for their workers.

Second, get proactive in making misclassification costly to contractors, the way New York and Illinois have done in recent years.

In New York, for instance, a 2010 law makes it a presumption that workers in the construction industry are employees, not “independent contractors.”

And the burden to prove otherwise is on the company. Violations of the law can lead to penalties up to $5,000 per misclassified employee. Illinois has taken a similarly strong stand.

And while the McClatchy study found a misclassification rate of nearly 40 percent on public projects in Southern states, where “right to work” laws are popular, it found no instances in the dozens of projects reviewed in New York and Illinois, both of which have a strong union presence.

Perhaps there’s a lesson there for taxpayers tired of being ripped off by scammers….”

Read the full story at EDITORIAL: End ‘independent contractor’ tax dodge by construction companies.

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