Tax Fraud

August 17, 2022

District director, Troy Mouton sent a warning letter to the Advocate cautioning contractors to avoid this practice. He goes on to explain how the process works and how it is unfair. 

Companies try to cut costs by illegally misclassifying workers to reduce labor overhead, which can result in an up to 30% reduction on paper. The reality is, misclassifying workers costs everyone, tax payers, contractors, the government and is an inefficient way to manage a project. 

When workers are misclassified, contractors can incur Fair Labor Standards Act violations that can result in back wages and liquidated damages owed to affected workers. These amounts can add up quickly and become liabilities for companies when they least expect them or can afford them. It also deprives workers of their rights to benefits such as job-protected leave, insurance benefits and eligibility for retirement or investment plans.