Massachusetts Has A Wage Theft Problem In The Construction Industry

A University of Massachusetts Amherst Labor Center study has recently revealed the “not so perfect” side of Boston. Within the city, the construction sector is riddled with inequality, cash payments, and poor employee treatment.

            Labor brokers are commonly found within non-union residential construction businesses and therefore, a system of wage theft and worker abuse inevitably runs rampant. Brokers tend to locate undocumented works who are given little pay and limited to no security, costing Massachusetts millions of dollars in unpaid payroll taxes. Back in 2019, labor costs for the states’ construction employers who utilized off-the-books employment, was reduced by over $140.4 million.

General contractors and developers also benefit from wage theft. With residential construction being smaller and less costly than large commercial projects, wage theft tactics are easier to implement. Employees therefore, have a denial of wages and benefits that should be righteously owed to them. The year of 2019 saw between 22,146 and 36,719 Massachusetts construction workers impacted by wage fraud. With a model like this continuing, certified contractors will remain undermined and employee exploitation will continue.

The Department of Unemployment Assistance revealed that from 2017-2019, 16.8-17.9% of construction employers in Massachusetts classified their workers as independent contractors. Such mis-classification has resulted in a $24.5 million to $40.6 million shortage of Massachusetts’ 2019 unemployment insurance fund. Intentional misrepresentation of workers is most common among the siding, framing, carpentry, painting, drywall, flooring, and roofing boroughs of the construction industry.

With Massachusetts having a $22 billion construction industry net worth, many believe laws need to be revisited and stricter punishments must be implemented. Joint liability laws and successor policies have already been passed in states like California where developers and contractors become responsible for the behavior of contractors, subcontractors, and labor brokers. Several additional states have been looking into this legislation.