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At least 15 dead as severe weather sweeps across central US; on Memorial Day, IA labor leaders honor fallen workers; Medical center installs microgrid to safeguard clinic power supply; 'Second look' laws gain traction, but MS sticks to elderly parole; Will summer heat melt New Mexicans' cravings for ice cream?

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One congressman cites ways Biden could get more support from communities of color. A new Louisiana law reclassifies two abortion medications as controlled substances. And Ohio advocates work to boost youth voter turnout.

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Smokey Bear thought only "you" could prevent forest fires, but decomposing mushrooms may also help, a Native American community in Oregon is achieving healthcare sovereignty, and Colorado farmers hope fast-maturing, drought-tolerant seeds will better handle climate change.

Labor Leaders: WI Tax Fraud Case Warrants More Scrutiny Over Trades

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Monday, August 21, 2023   

Construction union leaders in the Midwest hope law enforcement and other entities take notice of the outcome of a tax evasion case involving a Wisconsin drywall contractor.

Last week, Gustavo Reyes was sentenced to 18 months in prison after pleading guilty to tax evasion charges in May.

The Department of Justice says Reyes has more than a $500,000 in unpaid taxes. Robb Kahl, executive director of the Construction Business Group, said it goes beyond hiding income from the Internal Revenue Service.

Reyes was considered a "labor broker" who served as a middleman between larger project contractors and those hired to work on sites.

Kahl noted that Reyes' actions align with bad actors in the industry.

"In the facts of this case, what they do is they'll just create multiple Limited Liability Corporations to keep evading tax collection," said Kahl. "They will label every single person working for them, who clearly are their employees, but they'll label them all as independent contractors."

He said workers become exploited in the process because they're paid in cash and are excluded from full wages and benefits, like workers' compensation. And many are migrant workers fearful of speaking up.

Unions say payroll fraud convictions for the trades are rare in Wisconsin.

Kahl acknowledged that not all agencies have investigative resources, but he said he hopes the sentencing creates more awareness.

Burt Johnson, general counsel for the North Central States Regional Council of Carpenters, said the outcome should serve as a wake-up call to the industry, as well.

He said it underscores the concerns organizations like his have been calling attention to.

"The people at the very top making decisions about how the workers are going to be treated on their projects," said Johnson, "those are the people who need to pay attention to this case."

And Kahl said it's not just the workers who suffer. He said firms that follow the rules are outbid for projects, while also noting that taxpayers eventually feel the pain.

"What ends up happening is the rest of us as taxpayers are picking up those bills," said Kahl, "when workers get injured because obviously, they need medical care."



Disclosure: North Central States Regional Council of Carpenters contributes to our fund for reporting on Livable Wages/Working Families, Social Justice. If you would like to help support news in the public interest, click here.


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