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The Epidemic of Wage Theft in Residential Construction in Massachusetts

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Abstract
Our research documents how the illegal theft of workers’ wages has reached epi- demic levels in residential construction in Massachusetts. We conducted three case studies examining: the subcontractors for Pulte homes; the drywall industry and specifically New Haven Drywall; and affordable housing construction by a com- munity development corporation (CDC) based on 27 in-depth interviews with con- struction workers, contractors, homeowners, union staff, and community-based or- ganizers. We detail how contractors in residential construction responded to their financial losses in the Great Recession by the wholesale and illegal misclassifica- tion of their workers as independent contractors. By not paying taxes on workers’ wages and by not contributing to worker compensation funds, contractors reduced their building costs by 30 percent. In addition, we document how these contin- gent workers—the majority of who are undocumented immigrants—are routinely cheated out of their wages by contractors who pay late, do not compensate for overtime, and sometimes do not pay for work at all. Firms generate profits by vic- timizing some of the most vulnerable workers in Massachusetts, delivering poor quality homes to consumers, and leaving citizens of the commonwealth on the hook to make up for hundreds of millions in lost tax revenue. We also show that despite solid statutory language, enforcement mechanisms designed for regularized employers are woefully inadequate to protect workers from the illegal practices by the marginal firms that now dominate residential construction.
Type
Working Paper
Date
2015-05-11
Publisher
UMass Amherst Labor Center
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License
Attribution-NonCommercial-NoDerivatives 4.0 International
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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