Payroll Fraud & Underground Economy

Infrastructure bills are kicking off billions in construction projects. Will workers of color get the jobs?

February 7, 2022

By Chris Burrell
WGBH News

Workers of color now make up almost a quarter of the state’s workforce in the building trades, their numbers climbing 30 percent from a decade ago, according to the Bureau of Labor Statistics. But those trends aren’t clear in the state’s track record for hiring workers of color on public construction jobs. And with an infrastructure boom on the horizon fueled by federal funding, labor experts say the state has an opportunity to do better.

Despite a 2016 state mandate requiring all state agencies to track minority workers’ hours on...

Biden to sign order mandating PLAs on federal construction projects

February 4, 2022

Zachary Phillips
Construction DIve

Dive Brief:
President Joe Biden will sign an executive order Friday requiring project labor agreements on federal construction projects over $35 million, according to a White House fact sheet.

The order, which is effective immediately, will impact $262 billion in federal construction contracts and affect nearly 200,000 workers.

Nevertheless, the new executive order does not apply to work funded by grants to non-federal agencies, which includes the bulk of the projects funded under the $1.2 trillion Infrastructure Investment and Jobs Act, a senior official told Reuters.

Mark Erlich, fellow at Harvard's Labor and Worklife Program and retired executive of the New England Carpenters Union, said the advantages of PLAs are many.

"On larger projects, PLAs allow for an uninterrupted access to skilled labor working under standardized and uniform terms and conditions," he said. "I believe their value has been established and most of the objections have been refuted."... Read more about Biden to sign order mandating PLAs on federal construction projects

Can Progress on Diversity Be Union-Made?

November 6, 2021

By Eduardo Porter
NY Times

In Boston, setting a goal for a racially diverse construction work force is one thing. Meeting it has proved more difficult.

“There is a legacy of racism, which by no means has been eliminated,” Mr. Erlich said. “I respect folks in the community that complain that things are not changing fast enough. And they are not changing fast enough.” Still, he argues, unions realize that “they need to become less homogeneous and reflect the demographics of the city.”

And he warns that the nonunion contractors that will...

Is 'Striketober' the moment construction unions have been waiting for?

October 28, 2021

Joe Bousquin, Senior Reporter
Construction Dive

The convergence of worker shortages, supply chain snarls and vaccine mandates could give labor the upper hand at the bargaining table, experts say.

But the broader trend of American workers demanding higher wages and better working conditions almost two years into the chaos caused by the COVID-19 pandemic raises the question: Could more strikes be ahead for construction, too?

"What we're facing now gives unions leverage at the bargaining table, whether they strike or not," said Mark Erlich, a fellow in the Labor and Worklife Program at Harvard Law School, and former executive secretary-treasurer of the New England Regional Council of Carpenters. "It at least will help them get better agreements."

Gig workers deserve employment protections

December 18, 2020

Mark Erlich
Boston Globe

The misclassification of employees as independent contractors predates the emergence of the gig economy and has been a method of skirting the cost of standard worker protections.

In the midst of all the presidential transition drama, one of the most overlooked but consequential outcomes of the November election was the victory of Proposition 22 in California. Funded by Uber, Lyft, DoorDash, Instacart, and Postmates to the tune of a record-breaking $200 million, the ballot measure exempted ride-hailing and delivery drivers from a 2019 law, Assembly Bill 5, which brings California’s gig economy into compliance with conventional employment laws.

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Misclassification in Construction: The Original Gig Economy

November 26, 2020

by Mark Erlich
ILR Review

The misclassification of employees as independent contractors has been the focus of recent attention as a result of the implementation of that employment model by ride-share and other gig employers. But the practice long predates the emergence of the gig economy, particularly in the construction industry. This article traces the history of misclassification in construction and the subsequent emergence of a cash-based underground system of compensation, which have lowered standards and been among the major causes of the decline of union density in the industry. In addition, the author examines the regulatory environment at the federal level, which has largely enabled misclassification as well as attempts by state agencies to adopt more aggressive enforcement policies. Downloand Article

Worker Misclassification in Washington State Leads to Millions in Revenue Losses, New Harvard Report Details

December 16, 2019

Widespread misclassification of workers could mean millions of dollars uncollected and thousands of workers underpaid and without benefits

OLYMPIA, WASHINGTON — The number of employers engaging in worker misclassification in Washington state has risen substantially over the last 10 years. Misclassification has resulted in the denial of pay and benefits for tens of thousands of workers as well as millions of dollars in lost revenue, according to a new study from researchers with Harvard Law School’s Labor and Worklife Program.... Read more about Worker Misclassification in Washington State Leads to Millions in Revenue Losses, New Harvard Report Details

Press Conference to release “Confronting Misclassification and Payroll Fraud” report

June 26, 2019

Massachusetts Atorney General Maura Healey held a press conference at the State House to highlight the LWP report “Confronting Misclassification and Payroll Fraud,” by Mark Erlich and Terri Gerstein. The report details the increasing role of state agencies in enforcing misclassification laws and providing worker protections, crucial in an era of lax federal enforcement.

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Link to Press Release

“Confronting Misclassification and Payroll Fraud”

June 25, 2019

Report details increasing role of state agencies in enforcing misclassification laws and providing worker protections, crucial in era of lax federal enforcement

by Mark Erlich and Terri Gerstein

BOSTON, MA – Researchers from the Harvard Labor & Worklife Program, a program of Harvard Law School, released on Wednesday a report detailing the expanding and increasingly inventive role of state-level agencies regarding enforcement of worker misclassification laws and upholding workers protections. The report, “Confronting Misclassification and Payroll Fraud: A Survey of State Labor Standards Enforcement Agencies” is published in the midst of a decades-long trend of employers increasingly misclassifying workers as independent contractors. More urgently, within the past two years, the federal government, through the United States Department of Labor and the National Labor Relations Board, has been increasingly rolling back worker protections and enforcement.

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1099 Nation spreads its tentacles: Employees in every sense of the word — but without the benefits

April 10, 2018

MARK ERLICH
Commonwealth Magazine

For the past 40 years, employers have pursued a strategy of shedding obligations to their employees as part of a broader outlook that views labor as one more risky liability to move off a balance sheet. For some, this has meant the purposeful misclassification of employees as independent contractors, a tactic adopted by Beldi’s disreputable construction contractors as well as more high-profile and celebrated firms such as FedEx and Uber.

Labor and Worklife Program

A Program of the Harvard Law School