In response to recent incidents involving unreported cash payments by subcontractors on construction projects, Pittsburgh Mayor William Peduto has signed an Executive Order to combat construction fraud, promote worker safety and protect city tax revenue, according to www.constructiondive.com.
The Construction Fraud Executive Order cracks down on construction companies that commit tax, insurance and workers’ compensation fraud. It also aims to stop the practice of paying workers in cash to avoid taxes. According to a news release from Peduto’s office, such moves allow corrupt firms to outbid honest ones and fuel a cycle of lost wages, decreased tax revenue, and unsafe worksites.
The order stems from the findings of the city’s Joint Task Force on Construction Industry Fraud, which was founded in December 2018 and forwarded its final recommendations in April. Documented cases of fraud and labor violations were gathered by trained construction industry professionals after visiting multiple job sites and conducting on-site worker interviews.
The mayor’s order directs Pittsburgh’s Department of Permits, Licenses and Inspections and Finance Department to form a committee with several local building trade groups to examine city code and craft language to define the term “construction contractor” and create more accountable and transparent construction development processes. It also mandates that contractors or developers receiving a City of Pittsburgh public subsidy must report all workers on the project site.
In addition, the Department of Permits, Licenses and Inspections will list the names of all construction contractors on the city’s BuildingEye website to enhance transparency and accountability; discourage the dishonest use of subcontractors to avoid paying taxes and commit fraud; and raise awareness regarding companies involved in Pittsburgh construction projects.
