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N.C. IBEW Member Calls for Payroll
Fraud Crackdown

October 7, 2014

In an Oct. 5 op-ed, Charlotte Local 379 Business Agent Tommy Hill says lawmakers need to get serious about stopping payroll fraud. Photo by: Michael Kooiman

The recently published five-part investigative series from McClatchydc.com on payroll fraud revealed just how extensive this practice has become, particularly in construction.

North Carolina ranks near the top of the list when it comes to employers deliberately misclassifying their employees as independent contractors. This all too common practice lets employers get out of paying payroll, unemployment and others taxes, while cheating workers out of benefits like Social Security and workers' compensation.

In an Oct. 5 op-ed for the Charlotte Observer, Local 379 Business Agent Tommy Hill says the report must be a wake-up call for all public officials.

Not only does worker misclassification cost North Carolina nearly $470 million each year, it drives wages, benefits, and working standards down across the construction industry.

Building trades unions and our affiliated contractors invest millions in training our workers and paying them a living wage. By creating an “underground economy” of low-paid temporary workers, dishonest companies are degrading the skill and training that successful construction projects require to be done safely, on time and under budget.

Hill criticizes state lawmakers for their slow reaction.

State Labor Commissioner Cherie Berry has done nothing to fight labor violations in her 14 years in office, refusing to do even the most minimal investigations into reports of payroll fraud.

Gov. Pat McCrory has done nothing either, except to make promises, even though the News and Observer first reported about the extent of the problem two years ago.

He also calls out House Speaker Thom Tillis, who is currently locked in a tight U.S. Senate race with incumbent Kay Hagan, for blaming the problem on President Obama.

It might make for good politics, but it won’t put an end to the practice.

What we need is legislative action – both on the state and federal level. States that do the best job fighting worker misclassification and payroll fraud are the states with the toughest laws on the books – and the resources to enforce them.

Click here to read the entire op-ed.