News Detail

DC AG Karl Racine Releases A Report on Misclassification in the Construction Industry

Washington, DC Attorney General Karl Racine issued a press release today highlighting the results of an investigation into construction worker misclassification conducted by the Office of the Attorney General (OAG).  The report found that employer misclassification places law-abiding construction companies at a competitive disadvantage, hurts workers, and burdens taxpayers. The OAG found that “[DC] construction companies that misclassify workers unlawfully avoid at least 16.7 percent in labor costs, and their savings at the expense of workers can exceed more than 40 percent if the company is engaged in other forms of wage theft.” Companies are able to gain an unfair advantage “by failing to pay overtime, shifting tax burdens to workers, and evading other taxes and required payments entirely” according to the report.  

 

Additionally, the report noted that misclassification does not just negatively impact law-abiding employers but exploits some of society’s most vulnerable workers. The OAG noted that workers “lose the guarantees of federal and start employment and labor laws…miss out on important safety net programs and benefits…and are left footing their employers’ tax bill” when they become victims of the misclassification model.

 

You can read the full report from the DC Attorney General’s office here.