Carpenters Make Pitch for Stricter Tax Fraud Penalties

By Lisa Ramirez

The halls of the New York State Capital rang loud with the voices of union carpenters the afternoon of April 18 . It was Tax Fraud Day of Action , and they came from across the state to demand lawmakers bring the hammer down on unscrupulous contractors.

The Albany rally was one of many coordinated by the North Atlantic States Regional Council of Carpenters, which brings together union carpenters across New York, Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont.

Tax fraud, the carpenters warn, drains tax revenues and hurts honest employers, giving corrupt contractors an unfair advantage. By paying “off the books” and dodging workers’ compensation, unemployment insurance, payroll taxes, wages, and overtime, they drastically cut expenses, virtually stealing work from honest contractors. Meanwhile, workers are exploited, and municipalities, schools and community services are cheated out of their fair share of tax revenue.

Tax fraud and wage theft runs rampant, lawmakers say, costing New Yorkers as much as $1 billion in earnings every year when workers are not fully paid what they’ve earned, including mandated overtime. Dishonest employers use a bevy of methods to avoid paying full wages, benefits, and a fair share of taxes, from establishing sketchy shell companies to using check-cashing stores to pay people off the books.

State and local district attorneys have bolstered efforts to increase prosecution of wage theft, especially in the construction and real estate development industries, and say turning it into a felony would give them further clout against offenders, as well as create a more powerful deterrent.

Senate Bill S2832A, introduced by Senator Neil Breslin and Assemblymember Catalina Cruz, seeks to amend the penal code and enable prosecutors to charge larceny for stolen wages, elevating the charge from simple “scheme to defraud.” The legislation passed the Senate but not the Assembly last year.

“If your employer decides that this week he doesn’t need to pay you or he doesn’t want to pay you, you only can go to the Department of Labor and good luck with that,” said Cruz. She attended the Manhattan rally, where 1,000 members of the NYC District Council of Carpenters gathered on the steps of New York Public Library. “No longer can employers steal wages and call it the cost of business,” she said.

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