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NEW YORK, NY December 06, 2007 —A new report estimates that 50,000 construction workers in the city are either paid off the books or considered independent contractors when they shouldn't be.

REPORTER: The Fiscal Policy Institute's James Parrot calls it an underground economy. Parrot says the practice extends to a quarter of the city's construction workers and the loss in unpaid payroll taxes is close to $300 million.

PARROT: Costs are shifted to the taxpayers and to employers who are following the rules and paying into the payroll tax system and workers comp and unemployment.

REPORTER: Parrot says most construction workers falling into this category are concentrated in residential construction. The good government group's report compared the number of construction workers documented by the census in 2005 with payroll employment data from the Department of Labor from the same time.