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.


Gary Dawn Honored For 31 Years Of Service At The Assessor's Office

Habitat For Humanity Constructs 1st House Using EPB Zero Energy Resource Guide

Rep. Esther Helton To Serve On Building And Construction Workforce Center Board


The Hamilton County Assessor of Property’s office on Tuesday honored retiring Gary Dawn. He was the director of Quality Control for 31 years. He was honored for outstanding service ... (click for more)

EPB, Habitat for Humanity and green|spaces have partnered to develop a cost-effective way to build highly energy-efficient homes that also provides health and environmental benefits. With the ... (click for more)

State Rep. Esther Helton has been appointed to serve on the newly created Building and Construction Workforce Center Board. The mission of the board is to create an integrated workforce development ... (click for more)



Real Estate

Gary Dawn Honored For 31 Years Of Service At The Assessor's Office

The Hamilton County Assessor of Property’s office on Tuesday honored retiring Gary Dawn. He was the director of Quality Control for 31 years. He was honored for outstanding service to the people of Hamilton County. A reception was held, hosted by Assessor Marty Haynes. (click for more)

Habitat For Humanity Constructs 1st House Using EPB Zero Energy Resource Guide

EPB, Habitat for Humanity and green|spaces have partnered to develop a cost-effective way to build highly energy-efficient homes that also provides health and environmental benefits. With the participation of home-buyer Tempestt Jordan, the partners worked together to pilot the new home-building guideline through the construction of a Habitat for Humanity House and measured the ... (click for more)

Breaking News

TVA Demolishes Coal Plant For Development And Cleaner Energy

With a boom and a cloud of dust, the Tennessee Valley Authority imploded the 600-foot smokestack of its oldest coal-fired power plant, located in New Johnsonville. The implosion clears the site for future development and a possible generation project that could advance clean-energy technologies. “I’m sad to see it go,” said Bob Joiner, a TVA retiree who worked at the plant ... (click for more)

Police Blotter: Dispute Is Handled Amicably At Lee Highway Nail Salon; Report Unfounded That Woman Was Disrobing On Rossville Boulevard

A disorder was reported at a nail salon on Lee Highway. Officers spoke with a woman who said she was not satisfied with the service she received from an employee at the shop. She said the employee only did half the work she needed and she did not want to pay for the work done to her nails. The employee said she only wanted the woman to pay for the work done to her feet. Both ladies ... (click for more)

Opinion

Big Dogs At The City Get Most Of The Salary Money

The current crisis concerning recycling is nothing more than too much pork in the high end paychecks. The top 31 combined salaries in the city of Chattanooga amounts to $3,750,000 per year. That's right folks, millions. The average pay for these people is $121,000 coming from our hard-earned tax dollars. The average income of the citizens of Chattanooga is $26,200 per year based ... (click for more)

Roy Exum: My Garden In August

With some glorious rain in July, my garden is amazingly green and lush going into the hottest month of the year. And, whoa! What’s this: in the first week of August the temps aren’t expected to top 90 degrees and ample rain is forecast. During the month of July, we have had 4.71 inches of rain, where 4.77 is our normal. But for the year, we are three inches above normal which assures ... (click for more)