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The Issue of Misclassification: WJW Supports Carpenters

WJW Stands with Carpenters to End Misclassification!

WJW stands with community allies, union members, construction workers, carpenters, faith leaders, and more to fight the issue of misclassification. These photos of WJW staff and allies are from a protest of the contractor Suburban Drywall in July 2022. Suburban Drywall benefits from the practice of misclassifying workers as “contractors,” which is not only exploitative but places significant burden upon state and federal resources as well. Read on to learn more about misclassification, why it is exploitative and problematic, and what can be done.

Information on misclassification provided by Construction Business Group® (CBG). For more information, visit their website here.

The DOL also provides a useful fact sheet on employment relationships vs contractual relationships. Read it here.

What is Worker Misclassification/  Payroll Fraud?

Worker Misclassification happens when employers improperly classify workers as “independent contractors” instead of “employees.”  Worker Misclassification is illegal and may rise to the level of criminal Payroll Fraud. Worker Misclassification happens throughout the construction industry, however, it has become pervasive in the carpentry trades (e.g., drywall and floor covering).

Worker Misclassification/ Payroll Fraud deprives employees of important legal protections and employment benefits, including:

  • Minimum wage and overtime protections;

  • Worker’s compensation insurance coverage;

  • Unemployment insurance coverage;

  • Family and Medical Leave rights;

  • Employment discrimination protection;

  • Payment of income tax, social security and Medicare taxes by the employer—instead, the employees are responsible for individual, quarterly payment of these taxes; and

  • Employer-provided health insurance, retirement plans, vacation and sick leave, or other employee benefits typically offered in the workplace.

Worker Misclassification/ Payroll Fraud also harms honest employers and the public by:

  • Artificially and illegally lowering wages on public and private construction projects, which causes unfair competition;

  • Potentially shifts liability for wages and work injuries to general contractors and project owners from down-stream subcontractors who are engaging in Worker Misclassification/Payroll Fraud;  

  • Loss of tax revenue by the state and federal government; and

  • Placing a substantial strain on public resources due to lack of worker’s compensation and unemployment coverage for workers.

What can I do to stop Worker Misclassification/ Payroll Fraud?

The WI Department of Workforce Development encourages workers, employers or any member of the public to report suspected Worker Misclassification.  Reporting is as easy as sending an email.  To learn more, visit the DWD’s reporting site here.  

You may also call Construction Business Group® at (608) 240-4170 and they can assist you in determining whether to file a complaint and with what governmental agency.  Workers may be able to make a claim for wages owed and for additional damages and costs.

Worker Justice Wisconsin can also assist or direct you to resources. Call us at (608) 255-0376.