The economic recession put a lot of employers in a pinch. To keep their doors open, they were often forced to cut corners. In some cases, that meant closing early when sales were slow and in others it meant lowering payroll overhead by eliminating positions. However, there are suspicions that some sectors managed to keep employee expenses under control by misclassifiying workers, according to The Texas Tribune.
The home construction sector in the Lone Star State lead the country in terms of employment during the depths of the recession, but there are concerns that it did so at the expense of its workers, the source reports. A study called, "Build a Better Texas," reported that an estimated 300,000 of the 950,000 employees in Texas' construction industry were either misclassified under exemptions for which they didn't qualify, or paid under the table, which could have resulted in lost wages for their employee attendance.
If employers are found in violation of the Fair Labor Standards Act, they can be ordered to pay back wages and fined for noncompliance. Ultimately, these costs can be more expenses than compensating employees correctly in the first place.
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