Tennessee Department Of Labor And Workforce Development Focuses On Tax And Insurance Fraud In Construction Industry

Wednesday, September 25, 2013

The Tennessee Department of Labor and Workforce Development is taking new measures to ensure employers in the construction industry are protecting workers who are injured on the job or need unemployment benefits.

Legislation that became effective July 1, gives the department the authority to issue civil penalties against construction service providers who have avoided workers’ compensation and unemployment insurance tax premiums.  The department will also refer cases involving business operations that are in violation of the law to the Tennessee Bureau of Investigation or the appropriate district attorney general for criminal investigation and prosecution.

The department will investigate employers who fraudulently misclassify employees as independent contractors, under-report the number of employees, under-report the amount of payroll, misrepresent the type of work performed, or make unlawful workers’ compensation deductions from employees’ salaries or wages.  Employers who pay workers “off the books” or in cash often do so in order to avoid proper classification of their workers.  The department will obtain Fraud Detection Software to assist in identifying potential suspects.   

“This will help level the playing field for construction companies that provide insurance for their employees, but end up losing bids when others cut corners,” said Labor Commissioner Burns Phillips. “The department continues to work with stakeholders including government agencies and employers to ensure the appropriate actions are taken.”

Companies proven to have committed fraud are subject to a penalty of $1,000 or one and one-half (1 ½) times the average yearly workers’ compensation premium minus the premium dollars paid on the policy that was the object of the understatement or concealment, whichever is greater.

Based on estimates there are between 21,990 and 36,680 misclassified and unreported construction industry workers.  In Tennessee, misclassified and unreported workers are estimated to range from 11 to 22% of all workers in the construction industry (Misclassified Construction Employees in Tennessee. Dr. William Canak and Dr. Randall Adams, 2010). 

At least 34 other states have enacted legislation to locate noncompliant employers and deter unlawful practices.

Those wishing to report suspected employee misclassification in the construction industry may contact the Fraud Tip Line at 888 243.7283. A fraud tip form, as well as information about misclassification, can be found at http://www.tn.gov/labor-wfd/EMEEF/misclass_main.shtml.  The public is also invited to participate in Employee Misclassification Advisory Task Force public meetings which are posted at https://apps.tn.gov/pmn/index.html.



Alexia Cain Affiliates With RE/MAX Renaissance In Hixson

RE/MAX Renaissance in Hixson announced the affiliation of Alexia Cain as an affiliate broker. Ms. Cain has a strong background in Sales and Marketing and graduated from Auburn University in 2012 with a Bachelor of Science degree. Previously, she worked with a real estate investment company. Ms. Cain is a resident of Hixson and grew up in Atlanta.  She is the proud owner ... (click for more)

Commercial Center On Highway 153 Sells For $5,325,000

A commercial center near Northgate Mall has sold for $5,325,000. The center is at 5230 Highway 153. Tenants include Books-A-Million and Buffet King. The sale was to Magnolia Hixson Lp from Rmrtn Chatt Llc. (click for more)

UTC's College Of Business Receives $40 Million, The Biggest Gift In School History

The largest philanthropic gift in the history of the University of Tennessee at Chattanooga has been made to the University’s College of Business by Gary W. Rollins and Kathleen Rollins of Atlanta. This historic, $40-million gift also marks the first college to be named at UTC. The University of Tennessee Board of Trustees, at its annual meeting in Knoxville on Friday, voted ... (click for more)

2 Chattanoogans Were Among 3 People Killed In Collision With Train In McMinn County

Two Chattanoogans were among three people killed when a car was struck by a train in McMinn County on Thursday afternoon. The Ford Fusion that was hit was driven by Wendy M. Humphreys, 45, of Chattanooga. She was not wearing a seat belt. Johnny M. Ashworth, 46, of Chattanooga was one of the passengers. Jasmine Ashworth was also in the car. She and Johnny Ashworth had on ... (click for more)

The Boss, Claude Ramsey

I try not to overuse the word great, but we lost a great man today, Claude Ramsey. I had the pleasure of serving under him as director of Commercial and Industrial Properties for 14 years while he was the Hamilton County Assessor of Property. He was probably the smartest person I have ever known. He was tough but patient, kind, caring and compassionate. He knew how to get ... (click for more)

Roy Exum: Saturday Funnies

You know that rattlesnakes, copperheads and water moccasins are deadly reptiles that we in the South must avoid at all costs but then again, snakes are part-and-parcel of the Sothern culture. Some years ago, before the Alabama football team was preparing to play Notre Dame, a Chicago sports writer asked a Crimson Tide player the bigger difference between the two college juggernauts ... (click for more)