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Trump announces 'complete blockade' of sanctioned oil tankers to Venezuela; CA's Prop 36 turns one: More in prison, few complete treatment; Caps on nursing education funding threaten TN health-care workforce; OR farmworkers union calls for day of action against ICE tactics.

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House Republicans leaders won't allow a vote on extending healthcare subsidies. The White House defends strikes on alleged drug trafficking boats and escalates the conflict with Venezuela and interfaith groups press for an end to lethal injection.

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States are waiting to hear how much money they'll get from the Rural Health Transformation Program, the DHS is incentivizing local law enforcement to join the federal immigration crackdown and Texas is creating its own Appalachian Trail.

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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