Mass. gets $21M from ‘underground’ economy

BOSTON – Mass. Labor and Workforce Development Secretary Joanne F. Goldstein this month said the state has recovered more than $21 million over an 18-month period in owed revenue recaptured through the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification.
Gov. Deval L. Patrick established the task force in 2008 to address employer fraud and misclassification. The task force is composed of various state agencies that work together to reduce fraud and abuse within the “underground economy,” a term often referred to those individuals and businesses that choose to conceal or misrepresent their employee population to avoid responsibilities related to wages, payroll taxes, insurance, licensing, safety or other regulatory requirements. Often the employees are mischaracterized as independent contractors or paid in cash to avoid these obligations. The underground economy also encompasses other activities such as tax evasion, payroll fraud, under-the-table work and wage theft.
According to a statement, notable recoveries included the collection and disbursement of $1.17 million in unreported wages by subcontractors on the Marriott Copley Place, Boston (Host Hotels) renovation project, following a Joint Task Force investigation that began in the fall 2011. Task-force agencies also identified sub-minimum wage payments to workers; employers without workers’ compensation insurance policies; misclassification of workers; and unpaid unemployment insurance taxes by contractors and subcontractors working on the renovation project. •