According to recent news, a growing wage theft epidemic is sweeping the East Coast. Construction companies that specialize in real estate development in metropolitan areas have been sued for not treating their workers fairly by robbing them of overtime and unpaid wages. As tensions grow and more companies undergo scrutiny, it is imperative that your New Jersey Employment Practices Liability insurance is in effect.
What was once instilled to drive incentive to build affordable housing in New York and other large cities, the property tax exemption known as the 421-a is now causing serious controversy among the construction workers who build these housing complexes. According to the Association for Neighborhood and Housing Development, the 421-a allows nearly all residential construction developers a tax break “As of Right.” In other words, the city or state cannot deny them the tax break benefits the program provides despite the company abusing its privileges and ignoring the initial goal to build affordable housing. Sounds counter-productive, right? Because of the recent controversy, a revised version of the law is currently under review and the current form expires June 15, 2015.
However, millions of dollars are still owed to the workers on these jobs. For example, NY Daily News reported Galaxy Construction paid $753,000 in back wages in 2013- and that’s just one company! Through loopholes in the law, developers have been categorizing these workers as independent contractors and not providing the proper payment schedule, job protection, or tax deductions required of an employment relationship. When the workers are paid, it is often less than promised and the overtime they earn is virtually nonexistent. What’s more, by paying workers in cash and failing to report wages, the developers are getting an even bigger tax break.
Although a solution to this theft is under way, securing your business with the necessary protection against claims of improper business conduct can ensure your company’s success. At Tri-State Insurance Agency, we are dedicated to finding custom insurance solutions for your specific needs. To learn more about our offerings, contact one of our specialists today.