Members of the North Atlantic States Regional Council of Carpenters (NASRCC) hold event
with others to bring awareness to the issue of Tax Fraud in the construction industry.

Tax Fraud Days of Action Events to Occur Between April 14 and April 17, 2021

Each year Tax Fraud in the construction industry costs Americans $8.4 billion.

GOSHEN: Orange County District Attorney David M. Hoovler joined Orange County Executive Steven Neuhaus, NYS Senator Mike Martucci, NYS Assembly Member Karl Brabenec, NYS Assembly Member Colin Schmitt, other community and elected leaders, and leaders and membership of the North Atlantic States Regional Council of Carpenters (NASRCC) and Carpenters Local 279 at a press conference held on Thursday, April 15, 2021, in the Legislative Chambers of the Orange County Government Center to highlight efforts to combat tax fraud, wage theft, and other labor crimes.

Each year tax fraud in the construction industry costs Americans $8.4 billion. Much of this fraud occurs through paying employees “off-the-books,” misclassification of workers, and improperly treating employees as independent contractors when they are in fact employees who are entitled to all the benefits and protections that New York State law affords. Additionally, unscrupulous contractors who cheat have a competitive benefit over honest contractors who play by the rules. Employees who are paid off the books suffer from not being able to obtain overtime and other benefits and must often pay additional taxes which should be borne by the employers. In short, construction tax fraud hurts everyone.

District Attorney Hoovler reiterated his office’s zero-tolerance policy for any business that exploits workers and steals wages from employees. The Orange County District Attorney’s Office is regularly honored by the New York State Department of Labor for recoveries in unemployment insurance fraud cases. In 2018, representatives of the New York State Department of Labor awarded “Certificates of Merit” to District Attorney David M. Hoovler and five Orange County assistant district attorneys for “successfully prosecuting unemployment insurance fraud in Orange County

All employees, whether they work on public projects or private contracts, are entitled to receive their proper wages, and New York law provides criminal sanctions for employers who fail to pay, or steal, employees’ wages. Fraud involving Workers Compensation Insurance and Unemployment Insurance costs the state, private companies, and local governments huge sums of money every year. District Attorney Hoovler stressed his commitment to see that any allegations that workers’ safety or consumers’ safety have been recklessly compromised by construction companies looking to cut corners will be full investigated, and if appropriate, aggressively prosecuted.

Under New York State law, workers on all public works projects are entitled to receive the “prevailing wage” for the type of work that they perform. The prevailing wage is the minimum an employee can be paid on a public works project. The New York State Department of Labor establishes prevailing wages. The prevailing wage for each trade is determined by the wage negotiated in a given locality between labor organizations and private sector employers that employ at least 30 percent of workers in the same trade. The requirement to pay prevailing wages to all workers on public projects is set forth in the New York State Constitution and New York State Labor Law. Usually, contractors on public works projects are selected after a competitive bidding process. In addition to cheating employees, the failure to pay prevailing wages gives unscrupulous contractors the ability to submit lower bids than honest contractors. A contractor who pays less than the prevailing wage will have lower labor costs, and will therefore be more likely to be awarded the contract as the lowest bidder. That is grossly unfair to competing, honest contractors who play by the rules.

Since March 2015, the Orange County District Attorney’s Office has operated a Labor Crime Tip Line dedicated to receiving reports of crimes involving the workplace, particularly crimes involving failure to pay proper wages, unsafe working conditions, prevailing wage violations, workers compensation fraud, and other crimes where either employees or the government have been victimized. On the tip line, callers may leave information anonymously, or if they wish to be contacted by a District Attorney’s Office criminal investigator, they may leave their contact information. The telephone number for the Labor Crimes Tip Line is (845) 291-2107.

Bill Banfield, Assistant to the Executive Secretary-Treasurer of the NASRCC said, “For far too long, dishonest contractors have cheated their workers and left taxpayers holding the bag. This year on Tax Day, union carpenters across New York are standing up for their communities, for working families, and for honest business owners by demanding accountability and fairness in the construction industry. We are proud to participate in the nationwide Tax Fraud Days of Action and we are confident that these efforts will shed much-needed light on the issues of tax fraud and wage theft on behalf of all those affected.”

“I have made it a priority under my administration to support Orange County’s workers,” said District Attorney Hoovler. “No one deserves to be victimized while they are earning money to support their families. An employer’s number one responsibility is to make sure that its employees have been paid what they were promised. My office will do everything in its power to ensure that workers receive legal wages and are not victimized while they are working. I am pleased to be working with organized labor in Orange County to ensure that contractors who cheat on taxes or illegally pay improper wages no longer enjoy an advantage over contractors who follow the law.”

Orange County Executive Steven M. Neuhaus said, “I was proud to join my friends from Carpenters Local 279 to advocate for fair pay and benefits for our hard-working construction workers. Unfortunately, some companies do not compensate workers fairly, skirting the requirements to pay workers’ compensation, unemployment insurance, basic payroll taxes, wages, and overtime. These men and women are part of the fabric of our community, are vital to the economy and deserve to be treated fairly.” Said Orange County Executive Steven M. Neuhaus