The unit will focus primarily on the misclassification of employees as self-employed independent contractors. Saying that payroll fraud, also referred to as “wage theft” during the press conference, was the highest in the construction industry, the AG also stated “No family should live in poverty because greedy businesses cheat the system and refuse to play by the rules. This has gone on for far too long and Michigan isn’t going to wait any longer to crack down on these crimes.” The Democratic leaders also announced their intentions to introduce an “anti-fraud” legislative package which would include a “bounty hunter” provision to “create incentives to turn in violators.” AG Nessel also indicated her disappointment that no Republican legislator has announced their support for this effort.
lf-employed independent contractors within the construction industry. Such misclassification gives an unfair advantage to those companies that don’t follow the law. Bottom line: use of 1099 contractors is a legitimate common practice in the building industry. If someone shows up at your company asking for employment information on the contractors you use, they must have a subpoena and you are under no obligation to share such information unless they provide such. Should you be contacted about this issue by the State (or anyone else), please contact the HBA of Michigan. l