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Construction Is Booming, But Exploited Workers Pay Dearly

construction injury lawyerLike most things in Texas, the construction sector in this state is big. In fact, 1 in every 13 workers in the Lone Star State works in homebuilding and commercial construction, a  $54 billion-per-year industry for Texas.

Yet while construction is a key economic engine for the state, it’s also filled with dangers. Following years of illegal immigration, wages have gone down, and both construction site accidents and wage and hour violations are common in the industry. Out of an estimated 1 million construction workers in the state, approximately half are undocumented.

Many of those immigrant workers have lived in the United States for years or decades. With such a huge number of undocumented workers, the construction costs are extremely low; families moving to Texas from Washington or California can buy a brand new, spacious five-bedroom home for only $160,000.

That’s because labor in Texas isn’t just cheap; sometimes, it’s free. Miguel Perez is undocumented and has worked at construction jobs around Austin for almost 13 years.  According to Perez, the employer at one recent construction site owed him $1,200 but claimed he had no money. “I told him that I’m going to the Texas Workforce Commission, which I did,” says Perez. “Then after that, he came back two weeks later and paid me.”

Perez is more bold than most. Typically, undocumented workers are too intimidated to complain to Texas authorities, even if staying quiet means they’ll go home without pay. And they rarely speak with reporters.

Wage & Hour Violations

According to studies by the Workers Defense Project (Austin), the recession gave rise to widespread wage theft. Some workers make only $4 or $5 an hour, while others get nothing at all.

“Ninety percent of the people who come to our organization have come because they’ve been robbed of their wages,” says Cristina Tzintzun, the Workers Defense Project executive director.

The organization has collaborated with the University of Texas to publish a report analyzing working conditions and employment law violations in the Texas construction industry. http://www.workersdefense.org/Build%20a%20Better%20Texas_FINAL.pdf.  The study is the result of canvassing construction sites across the state, surveying more than 400 workers and collecting data on pay, benefits, on-the-job injuries, working conditions and residency.

Most of the time, cheated workers keep coming to work because from one week to the next, contractors dangle unpaid wages like bait. They provide just enough to keep construction workers on the hook.

Construction Site Accidents

But the perils of the construction industry are physical as well as economic. Several workers were killed at a building site in Dallas last year when a crane fell under windy conditions. OSHA charged the construction company with six serious safety violations, and imposed a $30,000 penalty.

Another problem those workers face – but legal and undocumented – is being misclassified as subcontractors. In fact, this is the case for up to 40% of construction workers.

As a recent story on NPR explains:

It works like this: Pretend you’re an interior contractor, drop by the Home Depot parking lot and pick up four Hispanic guys to install Sheetrock for $8 an hour.

By law, these men are your employees, even if just for the day. But in Texas, as in many other states, it’s popular to pretend they’re each independent contractors — business owners. Which means you are not paying for their labor but for their business services.

Under that particular arrangement, the contractor can duck out of paying Social Security taxes, payroll taxes, workers’ compensation and overtime pay. All the contractor has to do is pretend that the undocumented worker who was just paid in cash is going to cover all those state and federal taxes himself out of his $8 hourly wage.

“Our estimation is that there’s $1.6 billion being lost in federal income taxes just from Texas alone,” says the Workers Defense Project director. The report calculates that each year, $7 billion in wages from nearly 400,000 illegally classified construction workers are going unreported in Texas, resulting in billions of dollars in revenue lost from this rampant practice of statewide payroll fraud.

In a recent press conference with reporters, reformers and workers rights activists, the director gave her own personal summary of the situation: “It’s really the Wild West out there.”

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Emery Reddy