Lexington protestors call for an end to tax fraud

A national trade union has hired picketers in Lexington


Grace Mamon

A protestor sits with the UBC banner on Friday morning.

Julian Ramirez

The United Brotherhood of Carpenters has hired picketers to protest ‘tax fraud’ in Lexington. They sit with a banner along North Jefferson Street, adjacent to the Letcher Avenue parking lot every morning.

Frank Mahoney, communications director for the Eastern Atlantic division of the UBC, explained the extent of the protest and purpose behind it, in a phone interview.

“In the…industry, it’s common to hire a general contractor, who will then hire a subcontractor. The subcontractor will misclassify their workers on tax forms as independent contractors,” he said.

By classifying workers as independent contractors as opposed to employees, subcontractors are able to avoid paying taxes on their share of the profit. As a result, according to the UBC’s website, approximately $8.4 billion a year is lost in state and federal tax revenue.

The misclassification of workers goes beyond tax fraud, however. On a more humanitarian level, it directly impacts the workers themselves, according to UBC.

Luke Begovich, director of the organization’s protest operations in Lexington, said that, when misclassified, workers lose access to competitive wages, overtime pay, worker’s compensation in the case of an accident and healthcare benefits.

As a result, these non-union, rule shirking contractors are able to charge less for projects, effectively forcing union contractors out of competition for contracts.

The United Brotherhood of Carpenters hopes that, through their efforts, meaningful legislation would be enacted and regulated in order to avoid these harmful business practices.

However, according to an opinion piece published by Amber Peebles in the Washington Post, forcing contractors to abide by union rules is inefficient and unfair.

“Qualified non-union contractors… employ 98.7% of Virginia’s construction industry,” Peebles wrote.

Forcing contractors to abide by rules could have a reverse effect and limit the ability of workers to create an income, according to the piece.

The issue becomes a larger one yet. Forcing all contractors to abide by labor laws would bar undocumented immigrants from working in this industry.

The United Brotherhood alleges that Washington and Lee has employed tax-avoidant contractors in the past.

Carole Bailey, director of capital projects at the university, denied these allegations. She said that the university evaluates each contractor hired and wouldn’t contract a company following unethical or illegal standards.

Although recent legislation, such as Virginia Senate Bill 182 and Virginia House Bill 358, have worked to ensure that contractors are compliant with the law, the issue rages on. The UBC plans to continue fighting for certain workers’ rights in Lexington, and beyond.