Contract To Cheat: Employers Cheating the System... Cheating on taxes, cheating on benefits

[Benny the Mutt]

Independent contractors know quite well if they will be getting a 1099 or a W-2 at tax time. You are correct. The employer provides nothing. The employee provides their own benefits.



[quote=DRob4JC;36433265]Contract to Cheat

Across the country, roughly 10 million construction workers spend each day in a dangerous and fickle

[CrowGirl]

Originally Posted by mmmjv

There's something seriously wrong there.

There's something I don't understand here. Aren't hourly employees usually required to report to work by a specific hour? And aren't independent contractors more independent? As the name implies?

That is one if the indicia of a misclassified employee - independent contracts are generally supposed to control the manner in which the services are provided. This varies a little bit - for example, doctor that provides relief services for doctors on vacation or maternity leave can be engaged for particular shifts. But those are specialized circumstances.

Misclassification has been a problem for as long as I have been conscious enough to know the difference between W2 and 1099. As others have indicated in theory it shouldn't impact tax receipts as independent contractors are supposed to pay the taxes themselves. In theory. But misclassification is definitely used by employers to cur corners. Not just with taxes but with benefits and avoiding wage-hour and other employment laws.

The independent contractor system doesn't intrinsically make it easier for illegal immigrants to work in the U.S. because employers need a W9 to issue the 1099 statement and report the expense to the IRS. And the W9 reports either the SSN or other taxpayer ID of the contractor.

[elvis44102]

Originally Posted by DRob4JC

Yes - but this also looks at how the feds allow this to occur.... as it says here.

The federal government, while cracking down on the practice in private industry, let it happen in stimulus projects in the rush to pump money into the economy at a time of crisis.

...
The scheme persists in federal contracting, while government officials acknowledge the mistreatment of hourly wage workers and steep losses to the U.S. treasury.


Just putting this report out there for whomever is interested.

I haven't read through the whole thing yet.

republicans constantly cut federal workers, so not enough to do anything a business mans paradise

[Benny the Mutt]

Yep. If it isnt Biden, then it must be those darn illegals!


Guess what. Independent Contractors get a 1099 form instead of a W-2 for income reporting income.




Your posting is not correct.

Originally Posted by DRob4JC

Contract to Cheat

Across the country, roughly 10 million construction workers spend each day in a dangerous and fickle industry. They hang drywall, lay carpet, shingle roofs. Yet in the eyes of their bosses, they aren't employees due the benefits the government requires.

Employers treat many of these laborers as independent contractors. It's a tactic that costs taxpayers billions of dollars each year. Yet when it comes to public projects, government regulators have done nearly nothing about it, even when the proof is easy to get.

The workers don't have protections. The companies don't withhold taxes. The regulators don't seem to care.


It's called misclassification - where workers are considered as independent contractors. Therefore, a ton of tax revenue is never paid for work that is done and payment received. Private companies do this. The federal government does this.

Companies that received Stimulus money were allowed to get away with this as regulators looked the other way.

How does it work?

The companies declare on a routine form that the hourly wage earners working for them aren’t employees, as laws and several federal regulations require them to be, but rather are independent subcontractors. Those companies then don’t withhold income tax or file payroll taxes. They don’t pay unemployment tax. And they aren’t obliged to provide workers’ compensation.

Pretty simple.

I'm sure the illegals just make it easier to pull this off.

Sounds like we need to tighten this up BEFORE raising any taxes.

[remco67]

will always be this way because everybody involved wants it this way. Anyone who has friends or family or even acquittances in either construction or maintenance industry knows Business always outsources this type of jobs to :Independent contractors who are perfectly legal and then turn a blind eye as those contractors go hire the cheapest illegal labor they can. I have had friends and family run both these type of companies(construction and maintenance)who tried to hire American/legal workers and follow the rules. They couldn't do it they were constantly outbid by people who hired illegals. The only one i know who still has his own small construction company now plays along and hires the illegals like everybody else does.

[Benny the Mutt]

Originally Posted by elvis44102

republicans constantly cut federal workers, so not enough to do anything a business mans paradise

They want to privatize the US Post Office. I cant imagine the hand wringing by those who will be gifted that deal.



If republicans had their way, there would be a 1 party system run by a Board of comprised of CEO's of the most profitable corporations in America. The "chairman of the board" would be the Monarch.


Surely, the connies salivate when thinking about the utopia they want at all costs.

[Durpie22]

Funny how it is never mentioned with statistics how common this actually is. So for example, hard data on what percentage of construction workers are classified as independent contractors. It's likely extremely low and rare. And I am qualified to know this being that I work for a large general contractor and worked for many others. Its just a click bait article meant to generate outrage to be shared.

[crone]

Originally Posted by Durpie22

Funny how it is never mentioned with statistics how common this actually is. So for example, hard data on what percentage of construction workers are classified as independent contractors. It's likely extremely low and rare. And I am qualified to know this being that I work for a large general contractor and worked for many others. Its just a click bait article meant to generate outrage to be shared.

It depends on where you live. Texas does not license general contractors. The state would like them to have a business license. They are pretty picky with government work and workers. We do have a franchise tax on business. The state says anybody working on electricity or plumbing needs a license, but there is no provision for a permit or an inspection.

IIRC, several years ago The University did a study and determined 1/2 the construction workers in Texas are illegal. The state then got on it to determine how much money they were not getting. Nothing has been done about it.

And when the plumber we use tells me the price of whatever he is doing, I ask do you give a discount for cash. He always comes off 10-15%.