Small Piece of Good News Related to Payroll Fraud

Two weeks ago, I brought you a report about a group of workers in Austin, Texas who worked in sweatshop labor conditions and were denied overtime pay by their employers. The work was related to a construction project building luxury apartments for wealthy UT college students. Workers were forced to work long hours, often without water breaks in conditions where temperatures were well in excess of 100 degrees! Yet despite this hard work, their employers ripped them off from receiving their overtime pay.

I am happy to report that this week these workers received $35,000 in overtime payments according to a report on “Without God, none of this would be possible,” said one worker who was elated to finally get his paycheck. It’s not the first time he’s been stiffed by an unscrupulous construction company owner. “This happens way too much, but these people (the Workers Defense Project in Austin) helped me get the money I had already earned so I can feed my family.” The workers who got their money, thus far, have been those who worked on Callaway House.

This type of payroll fraud happens because of weak laws in Texas that allow unethical companies to cheat workers without fear of meaningful penalties for breaking the law.  These workers, who are clearly employees, are misclassified as independent contractors. This allows these unethical companies to steal from their workers without the protections of the Texas Payday Law.

The Texas Workforce Commission, under the leadership of then Chairman Tom Pauken, who is now running for governor, asked the Texas Legislature to update existing employment laws and put some teeth into the laws related to misclassification. While some progress has been made thanks to efforts by Senator John Corona from Dallas, powerful lobbyists for a couple of home builder companies have been able to use backroom tactics to block the legislation needed to establish a level playing field for all businesses and protect these workers.

This week's payment to these workers is a small success, but we have much work to do between now and the next legislative session, so we can push through updates to existing laws to reverse this practice and stop unethical companies from cheating workers and taxpayers.




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