NEWS 8 INVESTIGATES
Some key lawmakers in Austin want new legislation cracking down on tax cheats in the construction industry.
It's a response, in part, to a series of reports by News 8 about rebar contractor Andy Anderson, who first blew the whistle about tax cheats in the construction industry.
"What they're doing is cheating,” Anderson said.
Two years ago, contractors like Anderson were getting underbid by competitors who didn't pay taxes on their workers' wages... competitors like Macario Mireles, with AB Rebar. He beat Anderson on a bid for the Mansfield Performing Arts Center.
Court records show Mireles admitted to not paying taxes on his workers — instead treating them like private contractors. He was hit with tax liens after our story was broadcast.
"I had death threats on me, David. Multiple death threats. People were gonna take me out because of this thing here," Anderson said. "My position was, 'You’ve got to do what you've got do.' I'm going to do what I'm going to do."
Anderson said he doesn't know who was behind the threats. He does know he was one of the few willing to make waves, and talk about a problem called "misclassification." That's where companies pretend their "employees" are actually "independent contractors" to get around paying tax.
So what’s happening now?
“There's horsepower behind me now, for sure,” Anderson said.
News 8 has reported that the Texas Workforce Commission, which collects payroll tax, was doing little to crack down on companies who deliberately commit payroll fraud.
That has changed.
The commission is now asking the legislature to impose penalties on companies that intentionally commit payroll fraud on government-funded construction projects.
It is a change of heart that's been called "unprecedented."
State Sen. John Carona (R-Dallas), chair of the powerful Business and Commerce Committee, supports the TWC's new position, and is now pushing new legislation.
"I credit the News 8 investigation with bringing it to light and starting the ball rolling," Carona said in a written statement. "Now, we need more businesses to come forward with their stories so we can prove up the widespread nature and the need for stronger law."
A report to be released by a Texas-based advocacy group called the Worker’s Defense Project finds two out of every five construction workers in the Dallas area are "misclassified."
What does that mean?
"We estimate that there's about 300,000 construction workers out there, in Texas, that are being paid off the books. And that's a lot of tax money that Texas is losing out on,” said WDP policy analyst Emily Timm.
The practice is driving honest companies out of business, Anderson said, adding that he now prefers to do most of his business outside of Texas, where there are more protections for honest companies.
"People like me are just ready to give up. We're throwing our hands in the air and we're going somewhere else,” Anderson said.