Construction sector rife with payroll fraud, report says

chicago.suntimes.com
3 min read
fairly difficult
Researchers with union-backed groups charged that illicit practices harm taxpayers and 52,000 workers in Illinois.
Payroll fraud is pervasive in the construction industry in Illinois and the upper Midwest, costing taxpayers at a time of stressed state budgets, said a report from labor-supported research groups.

The report said 20% of construction workers in Illinois, about 52,000 people, suffer from payroll fraud, or what the researchers termed "wage theft." Factoring in lost wages and benefits, the cost in state tax revenue was $186 million in 2018, researchers said.

"It's a crime against every taxpayer. All are forced to pay more because of wage theft," said Frank Manzo IV, policy director at the Illinois Economic Policy Institute. The group completed the research with an affiliate, the Midwest Economic Policy Institute, which included findings for Wisconsin and Minnesota.

The cost to taxpayers in the three states because of the illegal practices was $362 million in 2018, the report said.

The fraud occurs when workers are paid "off the books" in cash, often when they are misclassified as…
David Roeder
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