The Texas Standard, a statewide radio program that airs on NPR stations throughout the state, has been doing an in-depth series on the realities faced by undocumented people who live here.
As part of the series, reporter Joy Diaz took a look at the plight of undocumented workers in the construction industry.
Stan Marek, CEO of MAREK in Houston, said one huge problem is unethical employers often misclassify their workers, allowing them to be paid under the table. Worker misclassification happens when employers pretend their workers are independent subcontractors when, by law, they should be compensated as employees. The degradation of the employer-employee relationships is what allows many companies to get away with having undocumented people on their jobsites but not on their payrolls.
“The system is broken,” says Marek. He says he remembers the moment it broke – when “the IRS allowed you to call your employees ‘independent subcontractors.’”
Not everyone can be an independent subcontractor; there’s a 20-point criteria to meet. Marek thinks it was tailor-made for unauthorized workers, and that’s why construction workers fit the criteria so well. He says employers exploit that loophole, “because you basically could put the responsibility of payroll taxes on [the independent subcontractors], which would become self-employment taxes,” Marek adds.
Employers who hire independent subcontractors, or “subs,” get to keep what they’d otherwise pay in payroll taxes. There’s no need to pay them benefits or overtime, and employers can even skip checking their subs’ immigration status. And it’s all legal.
“It’s badly misused,” says Marek. “So many companies have looked for that loophole.”
The reporter also spoke with Jose Garza at the Workers Defense Project in Austin.
“Up to 50 percent of the construction work force in the state of Texas is undocumented labor,” says Garza.
You can check out the entire online version of the NPR series on immigration by clicking here.