In December 2020, the District of Columbia Council passed the False Claims Amendment Act,  allowing workers and companies to recoup payments from large taxpayers that filed false tax claims. The act, now in effect, gives leverage to workers in the District of Columbia to regain the wages that unscrupulous employers stole for up to 10 years prior. This puts bad actors in the business community on notice. When tax fraud and wage victimize individuals or companies, they can now file a lawsuit alleging a specific crime. If they win their case, the court would mandate the return of funds and the reinstatement of taxes against the guilty party.

“This bill targets those with $1 million or more in annual net income, revenue, or sales and who have also knowingly failed to pay taxes on a very large scale,” said Councilwoman Mary Cheh.

The Eastern Atlantic States Regional Council of Carpenters (EASRCC) has been a strong advocate in favor of the False Claims Amendment Act because of the alarming percentage of misclassified workers who lose out on wages within the construction industry. The United States loses an estimated  $8.4 billion in federal and state income taxes due to this type of fraud. This is revenue that should be going to workers. It is money taken from Social Security, Medicare, senior care, veterans, and needed infrastructure projects such as roads, bridges and schools.

Executive Secretary-Treasurer William C. Sproule, Eastern Atlantic States Regional Council of Carpenters

“The use of labor brokers, tax fraud, and wage theft from cutting costs and from taking advantage of construction workers is unacceptable,” said EASRCC Executive Secretary-Treasurer William C. Sproule. Sproule continued, “This is a serious problem that we can overcome with the right leadership.”

 

Dishonest contractors have a devastating impact on a region, and many of these same contractors have avoided punishment for years. The passing of the False Claims Amendment Act has put Washington, D.C. on the right track and will begin to benefit the city with much-needed revenue for the future.