State Closes Tax Loophole on Builders

Tuesday, October 26, 2010

A law to close a tax loophole used by some employers in the construction industry takes effect today. The Fair Play Act is supposed to insure that building contractors pay all the taxes they owe and that their employees receive the benefits they're entitled to.

Studies have shown many builders classify their full time workers as contract laborers, rather than as employees, in an effort to avoid costs like overtime, workers compensation and unemployment insurance. That means the workers are ineligible for those benefits.

Under the new law, there's a clearer standard for who's counted as an independent contractor and who's an employee. The new rules must be prominently posted on all construction sites and employers who violate the law could face fines or criminal prosecution.


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