TENNESSEE
Misclassified Construction Employees in Tennessee

Audit of 2006 data yields estimate of 21,990  - 38,680 misclassified or unreported Tennessee construction workers--from 11 - 22 percent of all workers in the industry.  ESTIMATED LOSSES (2006 only):

•   Unpaid Unemployent Insurance Premiums: $8,418,872 - $14,927,321

•   Unpaid Workers Comp Premiums:  $52,099,310 - $91,632,920

•   Unpaid Federal Income Tax:  $15,225,452  - $73,414,752

•   Unpaid Social Security/Medicaid:   $7,786,768 to $42,058,044Median

NEW YORK    
Cornell Univ. Issues Presentation on Research in Employer Payroll Fraud

•  Costs and Extent of Misclassification and Other Violations
•  Summary of Key State Laws and Actions to Date

U.S. GENERAL ACCOUNTING OFFICE   
Study Says Misclassification a 'Serious Problem'

•  Annual Taxpayer Losses Exceed $1.6 Billion
•  DOL, IRS, and OSHA Agree to Report's Recommendations for Greater Interagency    Cooperation and Increased Enforcement of Tax and Wage-and-Hour Laws

•  UBC Summary of GAO Report w/ Link to Full Report (click here)

MICHIGAN   
Social and Economic Cost of Misclassification in Construction Industry

•  30% of Michigan employers misclassify employees or underreport payroll.
•  20% of the workers of employers who misclassify are either erroneously labeled
   self-employed or receive unreported payments.
•  In all, 8% of ALL Michigan construction workers are misclassified or receive
   payments that are not reported by their employers.
•  Some $1.5 billion in annual payroll not reported to Unemployment Insurance Agency. •  Cost to UI trust fund is $17 million each year.
•  Projections see an additional $20 to $33 million in state income tax lost every year.

FLORIDA   
Regulators' Report Cites WC Reforms, Fraud Fight in Reduced Premiums

•  Contractors' rates down 52% since 2003 reform/enforcement law. (Pg. 25)
•  "[T]wo primary reasons for the continued rate reductions:  [lower claims costs and]
    the continued crackdown on companies fraudulently avoiding payment for workers’
    compensation insurance."  (Pg. 25)

NEW YORK   
2008 Report of the Joint Misclassification Enforcement Task Force

•  12,300 instances of employee misclassification since task force inception in 2007.
•  $157 million unreported taxable wages.
•  $2.5 million UI taxes recouped in 46 joint sweeps, primarily of construction industry.

•  $1+ million in penalties for UI fraud penalties.

•  $4.8 million overall in newly assessed UI taxes.
•  $1.1 million in Workers Comp fines and penalties.

•  $12 million unpaid wages owed to workers.

TEXAS   
Austin Study Finds 38% in Construction Misclassified; Cost Tops $8.6M ""

•  38% of Austin construction workers were misclassified as independent contractors.
•  At least $8,618,869 in federal taxes and state unemployment taxes will be lost this
   year due to misclassification of Austin construction workers in vertical construction,
   just one sector of the industry.
• The Texas Workforce Commission’s 2008 audit of selected companies revealed that
   the construction industry had more misclassified workers and lost tax dollars than    any other industry in Texas.

U.S. TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
[summary;  link to full report below]
Study Cites Billions in Taxes Lost to Misclassification, Calls for IRS-Wide
Coordination to Increase Compliance & Full Research on Current Losses
• "In their response to the report, IRS officials agreed with the recommendations...
   The IRS has already begun addressing both [coordination and research] issues."

OHIO   
Report of the Ohio Attorney General on the Economic Impact of Misclassified Workers for State and Local Governments in Ohio
•  "The conclusion we reach is that worker misclassification very likely imposes
   direct costs to state and local governments in Ohio costing hundreds of millions
   of dollars in lost revenues annually to state and federal government."
   [From the Executive Summary]"