"Wage theft is rampant in the construction industries of Wisconsin, Minnesota, and Illinois," the st [View all]

Bruce Murphy
Murphy’s Law
Wage Theft ‘Rampant’ in State

https://urbanmilwaukee.com/2021/01/20/murphys-law-wage-theft-rampant-in-state/

10% of construction workers bilked of $23,500 per year on average. Will Legislature address problem?
By Bruce Murphy - Jan 20th, 2021 11:49 am


A new study finds that wage theft is a huge problem in the Wisconsin construction industry. It estimates that 10% of the state’s construction workforce, some 14,500 workers, are either misclassified or paid off the books. accounting for 10 percent of the workforce. As a result, they earn 31 percent less ($23,500 annually) in combined wages and fringe benefits than they should.

The study by the Midwest Economic Policy Institute also looked at Illinois and Minnesota, and found the problem was comparable or worse with construction workers earning 36% less in Minnesota and 29% less in Illinois due to wage theft.

In 2018, a legally employed construction worker in Wisconsin earned an average of $75,591 in salary and benefits versus just $52,114 in total compensation compared to the average illegally employed construction worker, the study found. Those misclassified workers “lose out on key benefits and protections like overtime pay, workers’ compensation rights, and unemployment benefits,” as Stephanie Bloomingdale, President of the Wisconsin State AFL-CIO, noted to Urban Milwaukee.

“There seems to be a mistaken belief that payroll fraud is victimless,” as Cindy Buchko, General Counsel at the Construction Business Group, has noted. “However, there is a real and direct connection between payroll fraud and labor trafficking… Exploitation of workers through wage theft, threats of violence, and coercion are tools of the trade for labor traffickers and part of the payroll fraud business model.”

“Wage theft is rampant in the construction industries of Wisconsin, Minnesota, and Illinois,” the study concluded. “To combat the problem, states can increase enforcement efforts or strengthen punitive actions against offenders, including making payroll fraud a crime.”

The study compared household survey data from the U.S. Census Bureau with payroll records submitted to state unemployment insurance programs in those three states. It built on past research, including a national study showing that between 12 percent and 21 percent of the construction workforce was misclassified or illegally employed across the United States in 2017..................