Report: Misclassification and Off-the-Books Wages Costing State Millions

Tuesday, November 29, 2016 | 0

New Jersey is losing millions of unpaid tax dollars through a thriving underground construction economy that misclassifies 35,000 workers or pays them under the table, according to a new report by the Stockton University William J. Hughes Center for Public Policy.

“The construction underground economy, it’s probably worth at least $640 million, and our ranges go from half a billion to $1.2 billion dollars and it involves 35,000 workers across New Jersey,” researcher John Froonjian told townsquaremedia.com.

Froonjian says at least $20 million in taxes and employment insurance are not being paid.

Average hourly construction wages in New Jersey were higher than in surrounding states and much of the country in 2007, the report says, but have dropped 7.6% in the past eight years while increasing in New York and Pennsylvania.

“It is a big problem when you have 35,000 workers being employed by people who are basically ignoring the law,” Froonjian told townsquaremedia.com.