Illinois lawmakers want to address potential tax fraud related to subcontractors within the construction industry. | Adobe Stock
Illinois lawmakers want to address potential tax fraud related to subcontractors within the construction industry. | Adobe Stock
Illinois carpenters are fighting against construction industry tax fraud, claiming that Illinois is missing out on $186 million every year when subcontractors pay their employees in cash.
Union leaders said the cash-payment practice causes employees to work without protection. The calls to reform the tax issue is gaining support among state lawmakers.
"[April 15] I joined my friends with the Chicago Regional Council of Carpenters alongside Senate President Don Harmon, Speaker Emanuel 'Chris' Welch (D-Westchester), and Attorney General Kwame Raoul to call attention to the problem of construction industry tax fraud in our state," Sen. Michael Hastings (D-Frankfort) in an April 16 Facebook post. "We must keep greed in check and bring to justice those who cheat hard-working, everyday Illinoisans."
Changes to the law are under consideration to address these issues.
Illinois Democrats are attempting to no longer label carpenters as independent contractors. This enables subcontractors to avoid state and federal income taxes in addition to Social Security and Medicare contributions. Union members have also complained that subcontractors do not provide benefits such as health insurance.
Welch said that subcontractors not paying a fair share creates a disproportionate burden for workers, WSILTV reported. The Illinois Attorney General's office started a worker protection unit centered on tax fraud that would deal with inequitable labor practices such as those of many subcontractors.
“As we consider our state and local procurement, we need to work with community groups, work centers, unions, and legally compliant employers to make sure we’re steadfastly addressing this issue," Welch said. "And you have my commitment to that."
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