What is Payroll Fraud?

Payroll fraud can mean any number of methods dishonest contractors use to cheat the system, and their workers. Dishonest contractors use payroll fraud to evade workers comp, unemployment insurance, and basic payroll taxes by knowingly misclassifying workers as “independent contractors,” paying those “contractors” cash off the books, and running other scams that impact carpenters and their families, along with the broader community and construction industry. Payroll fraud practices cost taxpayers billions, hurt honest businesses and exploit workers, depriving them of living the American Dream.

What does Payroll Fraud look like?

  • Dishonest contractors misclassify their employees as independent contractors in order to avoid paying taxes.
  • They do not contribute to workers’ compensation or social security.
  • They escape paying overtime or contributing to health insurance.
  • They pay workers in cash, “off the books” or don’t pay them at all.

How does Payroll Fraud affect you?

  • You may be unknowingly paying a dishonest contractor who is cheating workers by not paying them what they are owed or working in safe conditions.
  • Dishonest contractors are not paying the taxes that they owe to the government. This increases the burden of taxes on honest contractors who do right by their workers, and may impact the cost of doing business in the construction industry.

More Resources

Centro de Trabajadores Unidos en Lucha (CTUL)
ctul.net
2511 E. Franklin Ave.
Minneapolis, MN 55406
(inside of Bethany Lutheran Church)
612-332-0663

Heartland Workers Center
www.heartlandworkerscenter.org
4923 SOUTH 24TH STREET STE.3A
OMAHA NE 68107
402.933.6095

Workers’ Rights Center/Centro de Derechos Laborales
wrcmadison.org/WP/
2300 S. Park Street, Suite 115
Madison, WI 53713
608-255-0376

Center for Worker Justice of Eastern Iowa
cwjiowa.org
920 S. Gilbert Court
Iowa City, IA 52240
319-594-7593