The true cost of wage theft

Wage theft within the construction industry is a major problem for employees, homeowners and the taxpayers. The workers suffer directly, often being shorted for weeks of work or overtime. On many residential home construction projects, the quality of the homes being built is compromised, as workers are rushed, forced to work ever faster and finish more work in less time to avoid being fired.

This leads to additional problems, ranging from doors and windows that do not close properly to roofs that leak and siding that lacks vapor barriers, permitting mold and rot to develop. 

The businesses that perform this shoddy work are structured to ensure that there is no responsibility at any level, leaving homeowners on the hook for repairs. The Amherst study that looked at wage theft in the Massachusetts residential construction industry, found a rigged system that was based on a kaleidoscope of shifting subcontractors that often employed the same workers for the same developers.

Many of these workers were undocumented, and their immigration status was used as a tool by the companies to prod them to keep working in spite on nonpayment of wages and as a means of stealing their earned wages, by demanding at the end of a job official documentation. These entities would then refuse to pay if the workers lacked papers.

When these subcontractors are investigated, they shut down, and a short time later, reappear with a new name, but with the exact same behavior.

The research also showed a pattern and practice by large, national homebuilders, who would use the same sketchy subcontractors repeatedly, while claiming that they adhered to all labor laws.

Workers are left unpaid, homeowners are left with roofs falling in, taxpayers are left shorted millions of dollars in unpaid taxes and workers’ compensation payments and honest contractors are driven out of business. This behavior will continue until the state decides to vigorously prosecute these unscrupulous subcontractors.

Source: umass.edu, “The Epidemic of Wage Theft in Residential Construction in Massachusetts,” Tom Juravich, Essie Ablvasky and Jake Williams, May 11, 2015

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