From the News Tribune – ” An unlikely alliance between business and labor advocacy groups is pushing business-friendly Texas to adopt state and local reforms in order to bust private companies that cheat on taxes owed to the federal government on public projects.
The contracting scheme is used by construction companies that mislabel workers as independent contractors, rather than employees, to avoid paying taxes on them. A McClatchy investigation found that more than 150 contractors treated workers as independent contractors on 30 publicly funded projects throughout Texas from 2009 to 2013. The scheme cost taxpayers more than $1.2 billion a year in lost federal income, payroll and unemployment tax revenues, the investigation found.
“We are trying to work together to change this industry,” said Carlota Garcia, who was among 50 demonstrators at a summer rally that urged the Austin public school system to improve job conditions for workers on public infrastructure upgrades.
Worker advocacy groups say they support the movement because not paying workers and payroll fraud often go hand in hand. They say that a contractor who doesn’t pay his workers is also likely to cheat on taxes.
Business is an unusual partner in such a crusade, according to the worker advocacy groups, but the issue is hitting their pockets because companies that misclassify workers can do projects more cheaply, outbidding competitors who don’t cheat….”
Read the full story at Texas business, labor interests team to push for reforms.
- Labor Department announces grants to fight tax cheats (charlotteobserver.com)
- ‘Contractor’ Scheme Gouges Taxpayers, Workers (wcbi.com)
- Unusual partners join to fight tax cheating (star-telegram.com)