Underground Economy Costs State Millions
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Subcontractors should be paying the stay millions of dollars in fines and back taxes but the state isn't doing much to get the money they so desperately need.
It is described as an “underground economy” and Connecticut is losing out on millions of dollars in valuable income because of it.
The Hartford Business Journal reports that Connecticut's Department of Labor issued 220 stop-work orders over the past 22 months to subcontractors who have misclassified workers. However what they haven’t done is made an effort to collect back money from them.
Unlike Connecticut, New York and Massachusetts have attacked the problem of misclassified workers with a multi-agent faceted approach and because of that they have recovered millions of dollars in back taxes, fines, and unpaid wages.
The Journal reported that back in February that Gov. M. Jodi Rell proposed that the Employee Misclassification Advisory Board be eliminated. Rell’s office had not commented to the HBJ.
You can read the full investigative report form the Hartford Business Journal here.
Posted Monday, Aug 17, 2009 - 3:50 PM EST
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