A state investigation has uncovered numerous tax and labor law violations were committed by at least 15 construction companies in the $18 million renovation of the Boston Marriott Copley Place. A state task force targeted toward investigating the underground economy has found that the hotel’s contractors illegally classified employees and failed to report wages, which ultimately deprived the state of almost $86,000 in taxes.
These violations were first revealed by The Boston Globe last month, when it reported that the source of one contractor’s workers was a drug rehabilitation ministry in Philadelphia called Victory Outreach. These employees were not only paid significantly less than minimum wage-at $4 an hour-but also worked 12 hours a day, six days a week. The hotel’s owners have claimed that they were unaware of the alleged violations until State Police came to the hotel in January to personally interview the aforementioned workers.
However, investigators also discovered that a multitude of other companies were involved in the repeat violations uncovered by the task force, which stemmed largely from the employment of “shadow workforce” over a period of many months. Six companies were accused of misclassifying workers, and seven for failure to report wages or register to pay for unemployment taxes. The misclassification of employees as independent contractors is an attempt to avoid paying unemployment taxes or sponsoring other benefits. The failure to report wages is another method of attempting to avoid paying unemployment taxes.
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