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News & Press: Workers Compensation

Californias Underground Construction Industry is Repelling its Workers

Thursday, September 4, 2014   (0 Comments)
Posted by: Mark Alpert
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A new study reveals that California's construction industry is “sinking underground”, with 143,900 jobs –one in six workers unreported or misclassified by their employer.

Of the 143,900 jobs, 104,100 were unreported, while more than 39,000 were misclassified as independent contractors, largely so that their employers can avoid paying employment taxes and workers’ compensation.

As a result, and California lost $473 million, made up of $63m in unemployment insurance, $146 million in state disability, $264 million on and workers’ compensation.



The “underground economy”

The report, entitled ‘Sinking Underground: The Growing Informal Economy in California Construction’ was produced by the Economic Roundtable research company and underwritten by The United Brotherhood of Carpenters. Economic Roundtable used federal and state labour force statistics from between 1972 and 2012.

It found that the number of construction workers in what is known as the “underground economy”, in which employees are unprotected socially or legally in their jobs, has risen 400 percent since 1972. Immigrants, who comprised 43 percent of the Californian construction workforce in 2012, were deemed particularly vulnerable to this exploitation.

It is a problem that has increased substantially since the global economic downturn, and Yvonne Yen Liu, Co-Author of the report, attributed the circumstances in part to the tough economic conditions that continue even after the economy and construction industry have begun picking up.


Click the link below to read the full article on Global Construction.


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