Considered the “dirty little secret” of the construction industry, tax fraud drains tax revenues and hurts honest employers every year. The UBC is working to make construction markets fair and honest again by helping officials fight this scourge.
Unscrupulous employers gain an unfair bidding advantage of up to 30 percent by knowingly misclassifying workers as independent contractors, paying in cash off the books, and running other scams—often simultaneously. They skirt the requirements to pay workers’ compensation, unemployment insurance, basic payroll taxes, wages, and overtime.
Union workers’ productivity makes contractors’ bids competitive, but only on a level playing field. That’s why the UBC is committed to providing legislators and agency leaders with the research, resources, and professional assistance needed to identify and crack down on construction industry tax fraud.
To date, officials in nearly three dozen states have improved laws and enforcement, annually recapturing tens of millions in previously lost revenue. In some cases, workers’ compensation rates have dropped as well.
Fraud is not a union-only issue. Tax fraud affects the entire construction industry, shrinks public budgets, and even increases health care costs. The UBC is dedicated to shutting down this destructive criminal activity, regaining lost tax revenue and protecting taxpayers, honest employers and their employees.
HOW YOU CAN HELP
Why are so many construction contractors committing tax fraud? They do it to steal jobs from tax-paying businesses and their employees. Corrupt contractors pay workers off the books, or, less often, as independent contractors when they clearly shouldn’t. That allows them to evade provincial, local, and federal taxes, so they can illegally lower their labour costs to underbid law-abiding competitors.
Contractors who skirt workers compensation, wages and tax laws often cut corners with safety too.
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