Are contractors who pay their employees cash or who misclassify their workers as “subcontractors” for the purpose of avoiding taxes, worker compensation insurance cutting into your business? How is a fairly operated business to compete with prices based upon such underhanded schemes?
Some blame the government, claiming they have developed too many regulations and taxes to make it profitable to be in business. Others say that the practice has always been around, and will always be used by someone trying to gain an unfair advantage in a competitive market.
Whatever the cause, it’s obvious that a legitimate business cannot compete with one who avoids a significant overhead expense. Which bodes the question, what do we do about it? Every state “employment department” Web site with information and many with hotlines for turning in employers who fail to play by the rules.
Trowel Talk: The Underground Economy
By Bill Rogers