Portland Mayor Ethan Strimling and John Leavitt, regional manager of the New England Regional Council of Carpenters, spoke at a Friday rally calling for an end to "tax fraud" in the construction industry. Credit: Ed Morin | Maine Public

About 20 local members of the New England Regional Council of Carpenters held a rally Friday afternoon in Portland’s Monument Square to bring attention to what they called “rampant tax fraud” in the construction industry.

The council alleges that each year labor brokers and contractors cheat their tax obligations by misclassifying people they hire as subcontractors or independent contractors and paying them off the books.

The council’s regional manager, John Leavitt, said rather than hiring someone as an employee, the construction company brings them on as subcontractors or independent contractors.

“If you work for someone, take direction from someone, you’re an employee,” he said. “If they tell you what time to show up and what to do, you’re an employee of that company.”

Leavitt said that the situation is getting worse. He said bad apples in the construction industry are forcing contractors who want to be responsible to cheat or get underbid on a job. Leavitt said the council wants to see enforcement and legislation that would put more teeth into state law.

Speaking at the rally, Portland Mayor Ethan Strimling said that when the companies don’t pay taxes, it is other taxpayers who have to pick up the slack.

“They already get their tax breaks,” he said. “They get their TIFs, the credit enhancement agreements, they get all these deals all the time and then, on top of that, they misclassify works and don’t pay the benefits they should or the taxes they should.”

A construction industry organization did not return calls for comment.

This article appears through a media partnership with Maine Public.