The Mid-America Carpenters Regional Council announced an agreement to settle a lawsuit against Drive Construction, Inc. and Accurate Construction, LLC over Drive’s alleged failure to pay fringe benefits contributions on behalf of its carpenter employees for a five-year period ending in September 2021. The $1,000,000 settlement is a major victory in the union’s fight against wage theft and tax fraud in the construction industry.
The Carpenters Union’s lawsuit began in late 2019 when several current and former Drive employees complained that they had been paid in cash at a rate far below what is required by the union’s Collective Bargaining Agreement. Over the course of the lawsuit, more than 20 former Drive carpenter employees provided testimony that they had been offered cash by Drive superintendents or had been paid in cash. Paying employees in cash is a common scourge in the construction industry that results in the state losing out on key revenue because cheating contractors are not paying income taxes, employment taxes for Social Security and Medicare, and contributions for workers’ compensation and unemployment insurance.
A recent study from the Illinois Economic Policy Institute said wage theft and tax fraud costs the state $186 million in lost revenue every year.
While Drive and Accurate deny any wrongdoing, the union’s lawsuit alleges that Drive utilized Accurate Construction, a non-union company, to funnel millions of dollars through fictitious companies set up by Drive Construction superintendents which was then converted to money orders and cash to pay Drive’s carpenter employees.
Based upon the strength of the union members’ testimony, the Illinois Attorney General launched its own investigation into Drive Construction’s payroll practices and currently has a case pending against Drive and Accurate in the Circuit Court of Cook County.
