Task Force on Payroll Fraud and Worker Misclassification Meets to Build on 2020 Report, Recommendations – SUPPORT


MADISON – The Wisconsin Building Trades Council commends the work and recommendations drawn from the Task Force on Payroll Fraud and Worker Misclassification. The 15 Trade Unions and the 40,000 hard-working men and women fully and strongly support the direction of the Task Force.

The report’s five recommendations the Wisconsin Building Trades Council Supports include:

– Recommendation 1: Create an enhanced Contractor Registration Program
– Recommendation 2: Create an Interagency Coordinated Enforcement Team
– Recommendation 3: Increase the capacity of the Department of Workforce Development to investigate and enforce
– Recommendation 4: Develop Penalty Structure for Worker Classification Violations that Deter Repeat Violations
– Recommendation 5: Educate Workers and Employers on the Rules, Requirements, and Penalties Associated with Worker Misclassification

With these recommendations, the burdens in which misclassification fraud impose on the residents and taxpayers of Wisconsin can be mitigated and relieved. Also, and of equal importance, the COVID-19 pandemic has exacerbated Wisconsin’s revenue needs and the need to employ Wisconsin workers, without addressing the issues, taxpayers become victims and workers are even more vulnerable to misclassification with the current circumstances. With these recommendations, Wisconsin can instill fairness, justice, hope, and above all else, security in how we view and treat the hard-working people of our state.

Additionally, the anticipated loss of revenue in the form of UI tax underreported statewide for workers misclassified as independent contractors in 2019 is over $56 million, and the average of worker’s compensation benefits paid to workers injured while working for illegally uninsured employers over the past 10 years is $2.6 million annually. The Department of Revenue estimates that potentially $91.2 million in personal income tax revenue was forgone in 2019 due to worker misclassification as well as approximately $50.7 million lost in business taxes from the construction industry on an annual basis. Wisconsinites do not need new taxes or fees – State Government needs to collect the over $200 million from the unscrupulous contractors skirting the law and avoiding paying their share of taxes owed.

“Worker classification fraud has no place in Wisconsin. The legal system must hold those who are accused of these crimes against construction workers accountable,” said Jake Castanza, Executive Director of the Wisconsin Building Trades Council, an advocate for Wisconsin’s union construction industry. “We want to thank the Governor’s office, the Task Force, and the Building Trades Unions in our state for protecting workers and our industry and putting forth these recommendations to protect workers, their families, and our state.”

“At the end of the day, it is illegal for employers to use subcontractors to distance themselves from the obligation to pay workers, and we will use every tool to dissuade employers from this scheme,” said Jake Castanza, Executive Director at The Wisconsin Building Trades Council in a press release. “The report underscores the wide-ranging worker and tax fraud going on in the state of Wisconsin, and aims to recover the money these misclassified workers should have been paid after years of wage theft.”

The report can be found here.

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