Union Carpenters Rally with Lynn Leaders, Protest $2.6 Billion Stolen in Construction Tax Fraud

The New England Regional Council of Carpenters and Local 339 hosted a demonstration at Lynn City Hall on Thursday April 11. Their event illuminated the rampant tax fraud tainting the construction industry.  

“Construction industry tax fraud is an issue that robs taxpayers of critical funding for things like firefighters and local schools here in Lynn, and it gets worse when you note that a lot of it happens through the mistreatment of workers and the unethical ways that they are hired,” said NERCC Local 339 member Adam DiGiovanni. He informed attendees on the magnitude of illegal construction employment practices and their impact on Lynn and Massachusetts.

Each year labor brokers and contractors cheat their tax obligations by misclassifying their hires and paying an estimated 1.2 million workers ‘off the books,’ robbing taxpayers of up to $2.6 billion through lost federal income, employment taxes, and state income taxes.  These dishonest tactics deprive city, state, and federal budgets of tax dollars and ethical businesses the chance to fairly compete for work. Local neighborhoods lose funds necessary for school improvements, infrastructure maintenance, veteran assistance, and capacity for first responders.

When employers engage in tax fraud, workers can’t collect unemployment when a job finishes and they get laid off.  When they get hurt, all of the medical costs get paid by the worker and/or the taxpayers, instead of workers comp insurance. They miss out on years of Social Security contributions. Sometimes, employers commit wage theft and refuse to pay or fully pay workers for their work. This not only impacts workers directly, but also indirectly impacts every other taxpayer, since it puts a greater burden on public services.

“When I got hired for my old job I didn’t realize that I had an option to not be treated this way,” said Manny Domingues, an NERCC member. Prior to joining the union, Manny experienced worker exploitation and tax fraud methods though employee misclassification.  

He noted, that “Standing up in unison against this behavior means it will stop. The public is being robbed of tax money.  If they put pressure on local representatives and developers, we have a real chance to make this right for workers, for locals, and for funding public services in Lynn.”

Together, nearly 100 attending NERCC members and locals called for a unified front against this insidious activity by demonstrating with picket signs and banners.

Representatives also spoke about next steps for protecting taxpayers and workers in Lynn.  The Lynn City Council signed an ordinance to protect against wage fraud in March of 2018.

“As a union organizer, I’ve seen tax fraud up close when talking to workers.  Now I get to help the people of Lynn see just how pervasive this issue is and make sure they know they have rights. I’m so proud that our leaders here have spoken out against this. Now the hope is that other cities and towns in the North Shore will step up and do the same,” said Justin Anshewitz, an NERCC Organizer and a member of the City of Lynn Wage Theft Committee.

During the week of the April 15, national tax deadline, additional events will be held by other regional councils of the United Brotherhood of Carpenters and Joiners of America. Together these groups are working to elevate the conversation around construction industry tax fraud and the associated costs to American taxpayers and their communities.

 For more information on upcoming Construction Industry Tax Fraud Days of Action, visit the NERCC Facebook. Information on construction industry tax fraud can be found at The UBC National Stop Tax Fraud Website.

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