WAGE THEFT FACTS

Up to 2.1 Million U.S. Construction Workers Are Illegally Misclassified or Paid Off the Books

Nationally, 1.1 to 2.1 million construction workers are conservatively estimated to be misclassified or paid off the books in 2021. This represents between 10 percent and 19 percent of the construction industry’s workforce. Employers who misclassify their workers or pay them off the books are underpaying workers and shortchanging payments toward legally required benefits (such as Social Security, unemployment insurance, and workers’ compensation) by over $12 billion per year, costing taxpayers between $5 and $10 billion per year.

 

 

More than $8.4 Billion in Taxes Is Lost to Construction Industry Employer Tax Fraud Every Year

Cheating contractors use underhanded schemes, labor brokers, shell companies, shady bank accounts and check-cashing stores to evade their legal obligations. They fail to deduct and pay employment-related federal and state taxes, to the tune of $8.4 billion a year.

 

Misclassification of Workers Costs CA Taxpayers More than $7 Billion per Year

According to the California Department of Labor Standards Enforcement, misclassification of workers—just one other type of wage theft—costs the state more than $7 billion every year.

 

CA: Wage Theft Claims Since 2017 Total More Than Half a Billion Dollars

CBS News analysis of data obtained by CalMatters, from the California Department of Industrial Relations, found tens of thousands of cases across California: 63,442 claims of wage theft since 2017, totaling more than half a billion dollars, at $558,617,654.

 

26% of Private-Sector, Nonunion Workers Experienced Wage Theft in 2019

Further, as many as 26% of the 17.75 million private-sector, nonunion workers subject to forced arbitration, or 4.6 million workers, experienced wage theft in 2019.

 

It Takes Nearly Four Times Longer than State Law Permits for Average Wage Theft Case to Reach a Decision

California’s wage claim system is so backlogged it takes nearly four times longer than state law permits for the average case to reach a decision, according to a CalMatters’ analysis of state data. Most workers drop or settle their claims before a hearing. Judgments are issued if a worker persists and wins.

 

Of Employers Issued Court Judgements in Wage Claim Cases, Only 1 in 7 Paid Workers Full Amount

California issued $32.7 million worth of wage judgments to more than 1,800 employers in 2017. Five years later, 1 in 7 of the debts were recorded as satisfied. Employers in subsequent years paid even fewer.

 

Over 5 Year Period: 9% of Wage Theft Cases Were Recorded as Satisfied, 75% of Which Were Not Paid

An analysis of five years of the agency’s public data (2017 through 2021) by CalMatters revealed that 9% of court judgments were recorded as satisfied, or paid in full. Another 16% of those judgments were paid in part or in installments. Three-quarters of workers were recorded as receiving no payment. Those employers who received judgments against them in 2017 — and therefore had five years to pay workers — paid in full 14% of the time, the data shows.

 

Wage Theft is a Crime!

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Raise Your Voice

Construction Wage Watch encourages anyone experiencing similar conditions to those described in these Case Files to be brave like workers on these construction projects and raise your voice for justice! There are many resources and activists dedicated to fighting for you. Please share your story with us and remember that there is strength and power in numbers!