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Apr
2013
25

NPR Picks Up Report on Texas’ Underground Construction Economy Where $4/Hour Is Commonplace

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In Texas, construction is a $54 billion industry that employs one in every 13 workers. Though thriving on the surface, Texas construction workers face increasingly dangerous conditions and are frequently improperly paid. Of the more than one million construction workers in the state, nearly half are undocumented and employee misclassification is commonplace. But with the assistance of groups like the Workers Defense Project (WDP) , many of these undocumented workers have a new voice against the employers that exploit them.

Cristina Tzintzun, Executive Director of the workers’ rights group recently told NPR that “Ninety percent of the people who come to our organization have come because they’ve been robbed of their wages.”

We touched on a vital February report put together by WDP and other organizations including the Texas Building and Construction Trades Council (BCTC) that outlines the conditions Texas construction workers face. Wages of as little as $4 an hour, substandard safety conditions and unchecked misclassification that leaves the government on the hook for dubious employer behavior are the norm.

Awareness is now growing with the recent NPR coverage. The influential outlet made Texas construction the focus of a small series of podcasts that go beyond statistics and figures to personalize this plague:

Guillermo Perez, 41, is undocumented and has been working commercial construction jobs in Austin for 13 years.

“[The employer] said he didn’t have the money to pay me and he owed me $1,200,” Perez says of one job. “I told him that I’m going to the Texas Workforce Commission, which I did. Then after that, he came back two weeks later and paid me.”

Perez is brave. Undocumented workers are usually too afraid to complain to Texas authorities, even when they go home with empty pockets. And they almost never talk to reporters.

The Workers Defense Project works hard to fight employee misclassification, a growing problem in the Lone Star State. Cristina Tzintzun gave NPR the following example of how contractors are misclassifying employees in Texas in order to avoid paying them benefits and proper wages.

“We found that 41 percent of construction workers, regardless of immigration status, were misclassified as subcontractors,” she says.

It works like this: Pretend you’re an interior contractor, drop by the Home Depot parking lot and pick up four Hispanic guys to install Sheetrock for $8 an hour.

By law, these men are your employees, even if just for the day. But in Texas, as in many other states, it’s popular to pretend they’re each independent contractors — business owners. Which means you are not paying for their labor but for their business services.

With this arrangement, the contractor — you — don’t have to pay Social Security taxes or payroll taxes or workers’ compensation or overtime. Instead, you pretend the undocumented Hispanic worker you’ve just paid in cash is going to pay all those state and federal taxes out of his $8 an hour himself.

“Our estimation is that there’s $1.6 billion being lost in federal income taxes just from Texas alone,” says the Workers Defense Project’s Tzintzun. The report estimates that $7 billion in wages from nearly 400,000 illegally classified construction workers is going unreported in Texas each year, resulting in billions of dollars in revenue lost owing to institutionalized statewide payroll fraud.

As we speak, important legislation is moving through the Texas legislature that would curb employee misclassification. Reports like the one put together by WDP and the Texas — and the subsequent coverage from mainstream press — are crucial to righting this rampant wrong.

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