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Center for Social Policy
McCormack Graduate School
University of Massachusetts Boston
100 Morrissey Blvd.
Boston, MA 02125-3393
Phone: (617) 287 5550
Fax: (617) 287 5544
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| Maine Misclassification Media Advisory |
Author(s):
John Trumpbour & Elaine Bernard
Source(s):
The Construction Policy Research Center of Harvard School of Public Health and Harvard Law School
Date: April 27, 2005
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FOR IMMEDIATE RELEASE: Monday, May 02, 2005
Contact: John Trumpbour or
Elaine Bernard (617) 495-9265
MEDIA ADVISORY
DATE: Monday, April 25, 2005
TIME: 11:00 A.M.
PLACE: Labor Committee Room, Cross Office Building, Augusta
Employee Misclassification Highlighted in Study and Forum Hosted by Researchers from The
Construction Policy Research Center of Harvard School of Public Health and Harvard Law School
On April 25, 2005 the Construction Policy Research Center of the Harvard School of Public
Health and the Labor and Worklife Program at the Harvard Law School will release the results
of a study on employee misclassification in the Maine construction industry. Using recent
audit data from the Maine Department of Labor, Bureau of Unemployment Insurance, the Center
has found a high incidence of employer misclassification of employees as "independent
contractors," a practice with important public policy implications.
The problem of misclassification is an extension of the underground economy into the
mainstream of the construction industry. Employers label their workforce as "independent
contractors" in order to avoid mandated tax obligations and insurance premiums and,
thereby, realize savings and lower costs. The consequences are significant. Employers
that pay the appropriate taxes and insurance fees operate at a competitive disadvantage;
insurance carriers lose premiums; misclassified workers function outside the umbrella of
legal protections, such as overtime, unemployment, and workers compensation benefits;
and federal and state governments lose substantial revenues in income tax and unemployment
tax payments.
Previous studies by the US General Accounting Office (1989) and the US Department of Labor
(2000) have indicated that billions of dollars of revenue attributable to misclassification
may be lost on an annual basis, a reality that is particularly troubling at a time of
budget deficits. The Center's study, based on unprecedented access to unemployment tax
data, generates estimates which in turn allow researchers to cost out a tax loss caused by
misclassification.
The Center's findings will be presented by Research Director of the Center for Social
Policy at the University of Massachusetts Boston, Dr. Francoise Carré at the Labor
Committee Room in the Cross Office Building in Augusta at 11:00 AM on Monday, April 25.
A distinguished panel of leaders from government, labor, the construction and insurance
industries, will comment on the study findings and offer suggestions to address this public
policy problem.
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