Panel: Illegal Hiring Rampant
Timothy Fitzgerald, director of sales at Francis Harvey & Sons Inc.; Jack Donahue, business representative of the New England Regional Council of Carpenters Local 107; and Susan Mailman, president of Coghlin Electric.
Violations of labor law are more the rule than the exception in many parts of the construction industry, according to labor and business representatives who testified in Worcester this morning at an information session of the state Joint Task Force on the Underground Economy.
Gov. Deval Patrick created the task force in March to coordinate state efforts to prevent illegal hiring. Massachusetts Director of Labor George Noel told attendees that hiring workers under the table or misclassifying them as independent contractors costs the state tax money, gives unfair competition to legitimate employers and often leaves workers underpaid and in unsafe working conditions.
David Klein, president of Greenwood Industries in Millbury, said illegitimate companies can offer a 25 to 30 percent discount below his prices by avoiding costs like payroll and unemployment taxes and health care contributions. He said the problem is especially acute in residential and light commercial markets, where 80 to 90 percent of work is done through "sub-subcontractor" arrangements that treat workers as independent contractors.
Noel said the task force brings together multiple state agencies with authority over workplaces to make it easier to crack down on lawbreakers. But he said the group is looking only for problem employers, not workers who are in the country illegally.
"We have no interest in anyone's immigration status," he said. "Federal authorities have that job."
Jack Donahue, business representative of the New England Regional Council of Carpenters Local 107 in Worcester, said he would like to see the task force crack down on the general contractors, not just the illegitimate sub-contractors they hire.
"I believe these companies should face the corporate version of the death penalty and should be shut down," he said.
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