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Trump considers replacing Pete Hegseth, his embattled defense secretary pick, with Ron DeSantis; More support needed for over half-million WI family caregivers; Free, unbiased health insurance help available for Ohioans; Fungi help MS farmers unlock 'secrets' of healthy soil.

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GOP Senators voice reservations about Kash Patel, Trump's FBI pick. President Biden continues to face scrutiny over pardoning his son. And GOP House members gear up for tough budget fights, possibly targeting important programs.

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Limited access to community resources negatively impacts rural Americans' health, a successful solar company is the result of a Georgia woman's determination to stay close to her ailing grandfather and Connecticut is looking for more ways to cut methane emissions.

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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