Fraud in its many varieties should be slapped with the heavy hand of state and federal law. Period.
It's the message government regulators and law enforcement must heed if businesses — especially in our crucial construction trades — are to compete on a level playing field.
The problem was detailed in Times business reporter Andrew Steele's front-page Sunday article.
To secure a significant competitive advantage, some building firms are classifying workers as independent contractors rather than as employees — even though many of these workers meet the definition of employees under federal law.
Unscrupulous businesses misclassify employees to circumvent payroll taxes, worker's compensation and unemployment insurance premiums.
It's bad enough that firms engaging in this practice bilk our government of tens of millions of dollars every year.
It's also giving cheaters an unfair advantage over law-abiding firms.
It's a problem throughout our country, and Northwest Indiana is no exception.
The Region carpenters’ union recently succeeded in filing a complaint with the National Labor Relations Board regarding a LaPorte hotel construction project.
The complaint resulted in a settlement requiring the contractor to reclassify its workers as employees and to inform those employees of various federal rights.
Though it marked a victory against a bad business practice, local unions concluded the consequences for the business were a slap on the wrist.
Misclassification of employees often is referred to as payroll fraud.
In our state and federal court system, evidence of fraud leads to criminal charges, and those found guilty face prison and fines.
Serious consequences must be brought to bear in cases of payroll fraud, or unscrupulous companies will continue to use it for unfair competitive advantages.
It's not just a union issue. Employee misclassification hurts union and non-union firms that obey the law.
What message is sent to law-abiding firms if cheating businesses face little to no consequence for committing payroll fraud?
Doing little or nothing equates to tacit approval of the unfair practices — no doubt, leading to more fraud, lost revenue and Wild West business tactics.