A study by the Labor Center at the University of Massachusetts (PDF) in Amherst claims that since the economic downturn of 2008, it's become increasingly more common practice for many Massachusetts subcontractors to hire workers, particularly new immigrants, string them along without pay for weeks, and then pay them less than they were promised. The practice goes hand-in-hand with hiring workers as independent contractors to avoid paying workers comp or deducting payroll taxes.
Even if you're a reputable general contractor and play by the rules, these illegal practices may soon become your problem. According to a news report by Katie Johnson in the Boston Globe, wage and employment malpractice has become so widespread that it has prompted a state bill that would hold lead employers responsible for the wage violations of their subcontractors. The measure, which has not yet had a hearing, would also give the state the power to issue stop-work orders at job sites where workers are being misclassified or getting paid in cash.
Greg Beeman, president of Associated Builders and Contractors in Massachusetts, urges against holding lead employers responsible for the actions of subcontractors and creating an unfair burden. “We’ve got to be careful," Beeman is quoted saying, "To not do something that’s going to have severe repercussions to normal business operations of a very significant industry." Read more.