Tax Fraud

* There has been much written about workers’ compensation fraud in the medical and legal professions and even by the insurance companies, but there is a much overlooked area of workers’ compensation fraud, and that is fraud by the employer.

I operate a carpet installation workroom and I pay all workers’ compensation, payroll taxes and, liability insurance based on payroll. I am competing with and losing contracts to workrooms that illegally classify their employees as subcontractors. They continue to do this even though the workroom receives the goods, schedules the installations, instructs the installers, and is ultimately responsible for the job.

Many workrooms receive a certificate of workers’ compensation insurance (which their clients may require) simply because they have insurance on an office employee or warehouse worker while misclassifying their installers as subcontractors.

This is a widespread practice not only in the carpet industry but in many construction trades. Workers are not only without workers’ compensation insurance but many continue to move around frequently and many pay their helpers in cash; both practices are used to avoid paying income taxes, which in this time of fiscal deficit is unfair to all law-abiding taxpayers.

ELLIS HORTON

Santa Fe Springs