The Tennessee Department of Labor has been expanding efforts to uncover employer fraud within the construction industry.
The efforts, aided by recent legislation, will help identify employers who are paying workers under the table, intentionally misclassifying workers as independent contractors, and who are failing to report all wages paid.
The state Department of Labor & Workforce Development said a Nashville drywall firm accused of lying to an insurance company about how many employees were on its payroll was first to pay $300,000 in a settlement.
Officials said the fraud is typically used to avoid paying workers’ compensation and unemployment insurance tax premiums. It also gives deceptive employers an unfair competitive advantage over law-abiding firms, they said.
Part of the effort includes the hiring of additional investigators to detect the fraud. Since legislation went into effect in July 2013, three investigators have been hired.
The agency is also buying new fraud detection software and plans a public awareness campaign that will include a website and a phone line at 1-800-332-2667 for citizens to report a business suspected of misclassifying its workers.
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