News

Carpenters Team with Louisiana Authorities to Help Indict Labor Broker

We are happy to announce that the Central South Carpenters helped Louisiana authorities secure a multi-count indictment against a labor broker, operating in Louisiana, who was allegedly breaking many workers compensation laws.

Manuel A. Reyes, who allegedly runs a company called Rey-Co, was indicted late last year and is set to appear in court in the coming weeks to face charges related to violations of state workers’ compensation laws. Reyes, a sheetrock contractor located in Metairie, Louisiana is alleged to have committed fraud in that he:

  • misclassified 499 employees as independent contractors instead of as employees
  • underreported the number of employees he carried on his payroll
  • underpaid his workers’ compensation premiums by approximately $794,000.

Reyes has pled not guilty to all counts. Motion hearings have been set for March 2020. If convicted, Reyes could face up to $200,000 in criminal fines, imprisonment at hard labor for up to ten years, and restitution.

The East Baton Rouge Parish Grand Jury indicted Reyes on multiple charges after the Louisiana Workforce Commission accused him of engaging in unlawful practices under the Louisiana Workers’ Compensation Law.

The collaboration between the Central South Carpenters, the LWC and the District Attorney’s office is the first of its kind in the state and this is its first indictment.

The Central South Carpenters Regional Council is aggressively fighting this epidemic, which is also referred to as Construction Tax Fraud. “To be clear, we aren’t stopping or slowing down in our efforts to fight this problem until it is eradicated from the construction industry,” said Jason Engels, Executive Secretary-Treasurer of the Central South Carpenters. “We will continue to fuel the LWC and any other governmental authority with information we gather in the field and we anticipate many more indictments like the one recently handed to Mr. Reyes."

Why fraudulent misclassification is harmful to everyone:

  • Fraudulent misclassification of employees as independent contractors cost the state and federal government substantial losses in tax revenues, and negatively impacts the state unemployment insurance and workers’ compensation funds.
  • It also gives unscrupulous employers a competitive advantage against compliant employers who pay their fair share. It is estimated that employers who underreport payroll or misclassify employees as independent contractors shave as much as forty (40%) percent off of their labor cost.
  • Misclassified employees are often denied access to critical benefits and protections they are legally entitled to like minimum wage, overtime compensation, family and medical leave, unemployment insurance and safe workplaces.

Learn more about this problem at StopTaxFraud.net.