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May 25, 2024
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Updated On: Sep 254, 2015

Payroll Fraud: Contractors Can Make a Difference

Honest contractors are being fleeced by cheating contractors who commit payroll fraud. Cheating contractors save up to 30% in labor costs by using illegal labor practices, and that creates an unfair advantage, allowing them to submit lower bids and steal jobs from you.

Cheating contractors also cheat…
…the government by not paying taxes. That’s billions in tax revenue lost every year, leading to less work and higher taxes for you.
…the customer. Reputations can be destroyed if illegal or corrupt contractors are linked to their project.
…the worker. Off-the-books workers are denied basic safety net protections, earn less than what they’re worth and are often forced to work in unsafe conditions.
…the community. These cheaters still use healthcare, schooling, roads, and government aid services, courtesy of taxpayers and law-abiding employers. And that leads to high insurance rates and healthcare costs.
...the industry. The integrity of the industry has become so poor that it is more difficult to recruit and retain skilled craftspeople.

Corrupt contractors commit payroll fraud by intentionally and falsely misclassifying employees as independent subcontractors, or, more often, by paying workers off-the-books. Doing so enables cheaters to not pay what federal and state laws require, such as Social Security and Medicare taxes, state and federal unemployment contributions, overtime, or workers’ compensation premiums. Frequently, those corrupt contractors use law-breaking labor brokers to try to shield themselves from accountability.

Learn more at

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