Two drywall companies working on new General Assembly building face first worker misclassification charges
The new General Assembly building in Richmond. (Parker Michels-Boyce/ For The Virginia Mercury)
Two drywalling subcontractors working on the new General Assembly office building rising over Capitol Square are facing 10 counts each of felony embezzlement for allegedly misclassifying their employees as independent contractors to avoid paying payroll taxes.
Attorney General Mark Herring announced the indictments Wednesday. He said they are the first brought by a new Worker Protection Unit created by his office earlier this year.
For more than a year, labor unions have been attempting to draw attention to employment practices of companies working on an array of state construction sites around the capital city, staging giant signs that read “wage theft” on nearby sidewalks most mornings.
The issue has also caught the attention of lawmakers and state watchdog agencies. Herring said Thursday’s indictment was brought after an investigation in conjunction of the Office of the State Inspector General.
Herring’s office called worker misclassification one of the most common forms of worker exploitation. By falsely identifying employees as independent contractors, the office says employers “avoid paying unemployment and other taxes on workers and to avoid the costs of covering the employees with workers’ compensation and unemployment insurances, and it has been consistently shown to drive down the wages of other workers.”
The two companies charged in the case, GTO Drywall LLC and Richmond Drywall Installers Constructors, were unreachable for comment.
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