By, Kim Bobo, Executive Director, Virginia Interfaith Center for Public Policy

 Speech delivered on April 15, 2019, at the “Tax Fraud Day of Action” rally in Richmond

 

“Do not take advantage of a hired worker who is poor and needy, whether that worker is an Israelite or is a foreigner residing in one of your towns. Pay them their wages each day before sunset, because they are poor and are counting on it. Otherwise, they may cry to the Lord against you, and you will be guilty of sin.”
Deuteronomy 24:14-15

We have some sin – right here in Richmond.

“Thou shalt not steal” is one of the Ten Commandments I memorized as a kid. I never suspected I’d spend a lot of my life trying to get employers to stop stealing workers’ wages.

There are many ways unethical employers steal wages, but one of the most common tactics is payroll tax fraud.

On this April 15, tax day, we all know we have to file our taxes. The IRS does not mess around with us – we can’t be late or unclear about what we’re supposed to do. One of my sons learned this the hard way when he didn’t file his 2017 taxes until recently and had to pay a penalty. He suggested that the IRS should give recent college graduates a break. Well, they don’t.

But part of his challenge with taxes was that one of his employers paid him as an independent contractor when he should have been paid as an employee. No taxes were withheld and he owed more than expected. This employer folded up business, no one answers calls, and now my son is stuck paying both his side of taxes, the employer’s side, and of course an IRS penalty.

Too many employers think they have the right to choose whether workers are paid as employees or independent contractors. No, it isn’t a choice. There are laws. And some suggest that the laws are complicated, but they are not. As my friend Nancy Leppink, the former Wage and Hour director for the USDOL used to say, just use the mirror rule. If you get up in the morning, look in the mirror and think, “I’m going to work for myself,” you probably are an independent contractor. If you get up in the morning, look in the mirror, and think, “I’m going to work for someone else,” you are an employee and should be paid as such.

This payroll tax fraud is a growing problem here in Virginia and across the nation. The Virginia Interfaith Center stands ready to support efforts to crack down on all forms of wage theft, including payroll fraud. We support legislation that will stop and deter wage theft and efforts like the Governor’s Misclassification Taskforce to strengthen enforcement between agencies.

Wage theft is wrong. Payroll fraud is wrong. Thou Shalt Not Steal.