“Who’s Watching the Hen House?” Tax Fraud in HISD Construction Demands District Compliance

This Tax Day, April 17, taxpaying parents, workers, and community members are protesting the tax fraud that occurs in HISD construction projects as a result of misclassification of workers. Misclassification excludes contractors from paying payroll taxes, passing the burden to the worker and the community.

Harris County, the City of Houston, and Metro, among other public entities, have compliance mechanisms to ensure their contractors are complying with payroll taxes and prevailing wages. Currently, HISD is not conducting compliance audits of payrolls and worksites that would ensure that workers are receiving the proper wages based on their classification, with the required payroll taxes being deducted and matched by their employers.

Several workers on HISD bond construction projects have come forward to report misclassification and unpaid wages. “Not only did my subcontractor never pay me in full, when he did pay, he paid me in cash and I never got any tax forms,” said Marvin Mundo who worked at the Jane Long Middle School and Sharpstown High School renovation projects. In a January meeting with the workers and HISD Construction & Facilities administrators, their employer, Ricky Peters – subcontractor of Fort Bend Mechanical – admitted having no records of payroll or taxes for the aforementioned workers.

“I paid my taxes” said Marta Morales, parent from Jackson M.S., “I want to know why HISD isn’t making sure that contractors and subcontractors are doing the same when working on our schools.”

Worker misclassification and tax fraud are rampant in the construction industry. A recent study by the University of Texas at Austin and Workers Defense Project found that 38% of workers are misclassified in the construction industry, and that employer misclassification costs the state of Texas more than $8 million in lost payroll taxes and unemployment contributions.

“Houston ISD needs to monitor their contactors to make sure that they all play by the rules and that they all pay the workers,” said Jose Eduardo Sanchez of the Houston Interfaith Worker Justice Center. “If they do not do this, they are enabling the tax cheaters; in fact, they are helping them hurt workers and our community.”

WHO: HISD parents, workers, and community members
WHAT: Press conference and protest to denounce misclassification & tax fraud, and demand district compliance guidelines
WHERE: HISD Administration Building, 4400 W. 18th St.
WHEN: Tax Day, Tuesday April 17, 2012 – 10AM

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