Every April, the Eastern Atlantic States Regional Council of Carpenters (EASRCC) organizes its annual Tax Fraud Days of Action to raise awareness about the devastating impact of employer tax fraud and wage theft in the construction industry.
This multi-day campaign highlights how illegal labor practices—like paying workers off the books or misclassifying them as independent contractors—harm workers, burden taxpayers, and damage honest businesses.
Over 150 Events Across the Region
From April 12–18, 2025, local unions held more than 150 public events including rallies, advocacy days, and community education efforts. These events aimed to inform lawmakers, media, and the general public about the growing cost of tax fraud in construction.
In a press release, the United Brotherhood of Carpenters revealed that “state and federal tax losses reach at least $8.4 billion annually due to employer fraud schemes,” primarily through misclassification and cash payments that evade tax responsibilities.
The Real Cost of Tax Fraud
A 2023 study by the Century Foundation reported that up to 2.1 million construction workers are either misclassified or paid off the books. As a result, these workers are denied over $1.9 billion in overtime wages, and taxpayers are forced to shoulder a $5.1 billion burden to make up for lost employment tax contributions.
Misclassified workers often lose basic protections such as overtime pay, unemployment benefits, workers’ compensation, and Social Security contributions—leaving them vulnerable while dishonest contractors profit.
Solutions to End Tax Fraud in Construction
The Carpenters Union calls for coordinated action at every level—federal, state, and local—to hold bad actors accountable. Their recommended solutions include:
- Enforcing existing IRS tax laws more aggressively
- Expanding criminal penalties for tax fraud and worker misclassification
- Comprehensive immigration reform to protect vulnerable workers
- Public-private cooperation between agencies, banks, and contractors to detect and prevent fraud
