Struggling to stay in the United States, he feels invisible

Employer’s practices frustrate effort to live here legally

mlocke@newsobserver.comAugust 19, 2012 

WORKERSCOMP17.NE.073112.ASR

Mauricio is a mason whose had a hand in many major building projects. One of his bosses was breaking the law, paying by check or cash without withholding taxes, and Mauricio knew that. But, as he says, he needs the work so he doesn't ask questions.

SHAWN ROCCO — srocco@newsobserver.com

  • About this series In April, The N&O reported that at least 30,000 North Carolina businesses had not bought workers’ compensation coverage, as required by law. After that report, we heard from workers, lawyers and business owners about deeper problems surrounding laborers and businesses, particularly in the construction industry. To report this series, we reviewed thousands of pages of documents and computerized records and conducted dozens of interviews. To illustrate how the trend of off-the-books workers emerged and the mechanics and cost involved, we focused on masonry, though the practice is also common in other trades.
  • Employee vs. contractor The federal government estimates that employers who inappropriately classify employees as contractors cost as much as $2.72 billion in lost tax revenue in 2006. Determining whether a worker can be considered a subcontractor (classified in tax code as a 1099 worker) is based on a list of questions that deal with the employment relationship. While some agencies that examine whether a worker is properly classified may have particular standards, many use a 20-question test compiled by the Internal Revenue Service. Questions that would help determine whether a worker is a W-2 employee deal mostly with the employer’s control over the person. Answers that indicate more autonomy generally mean the worker can be treated as an independent contractor. Among the questions: •  Does the employer tell the person when and where to go for work and how to do the work? •  Did the employer train or have another employee train the new worker? •  Did the employer provide tools and other supplies needed to complete the job? •  Is this a continuous or expected to be a continuous working relationship? •  Does the employer dictate hours and approve time off? •  Is the worker expected to devote full time or substantially full time to the work? •  Is the worker required to submit regular or written reports to the employer? •  Is the worker paid by the hour or by the job? •  Does the employer pay travel expenses for the worker? •  Does the worker gain profits or suffer losses as employer does? •  Does the worker work for others as well?

When Mauricio paid a smuggler to sneak him over the border of Mexico, he knew he’d live a quiet life in America.

He didn’t know he would be invisible.

Mauricio, 27, is part of North Carolina’s underground economy. He is one of thousands of workers here illegally who find jobs with employers who cut corners by avoiding payment of taxes, insurance and overtime.

“When you need money, you don’t ask questions,” said Mauricio, who is being only partly identified because of his immigration status.

North Carolina has grown, in part, on his back. Mauricio’s fingerprints are all over some of the most prominent and celebrated structures from the Triangle to the coast: Kenan Stadium, PNC Arena, Carter-Finley Stadium. He can rattle through a list of schools and dormitories and office buildings he has helped build.

For most of those projects, Mauricio worked for Martin’s Bricklaying, a masonry company formed nine years ago as the building industry grew quickly in North Carolina. During at least some of that time, owner Sabas Martin Galeana has violated several state and federal laws, failing to withhold taxes and provide workers with the forms they need to settle their own obligations.

The News & Observer reviewed Mauricio’s pay stubs from the spring of 2012. The N&O talked to other former and current employees of Martin’s Bricklaying and reviewed more pay stubs, including some submitted as part of a pending workers’ compensation claim. Three times, Martin has violated state or federal requirements to pay unemployment insurance on his workers; he settled the last of three liens in 2009. All told, he owed more than $70,600 in taxes and penalties.

Martin’s business practices have gone largely undetected. He has prospered, living in a spacious Nash County home. Martin did not respond to several interview requests.

Business owners, state officials and policy advocates say businesses such as Martin’s have gained an edge by breaking the law.

Though undocumented workers can’t collect benefits such as Social Security or unemployment, employers are required to pay those taxes on their behalf. Because many of the workers wrongly classified or paid off the books are in the country illegally, normal triggers used to detect those who don’t pay taxes often fail.

“I may as well not even exist as far as they know,” Mauricio said.

In America seeking work

Mauricio was just a scrawny teenager when he came to America for a job with a steady paycheck that could help support his family.

Mauricio followed leads all the way to North Carolina, touted as a promised land: more jobs than the workforce could handle with few questions asked. He settled into a trailer with 15 other laborers and slept when a bed was available.

He soon found work as an assistant on a masonry crew. He learned quickly, and, in just a few years, became a full mason. Mauricio began to lay down roots and imagine a lifetime in America.

Around 2003, he said, he was working for Joyner Masonry Works, a Greenville firm. Near the end of the project, one of the supervisors pulled him aside and said they had no more work for him.

Gary Joyner, president of Joyner Masonry, could not be reached for comment.

The workers with a permit to work in the U.S. kept their jobs with Joyner, Mauricio said. Those without work permits were told to go see Martin, a fellow Mexican who was starting a masonry firm.

Where’s the W-2?

Mauricio feels like a ghost when he works for Martin’s Bricklaying. He said he has never provided any identification to Martin nor filled out an employment application.

“He doesn’t even know my address,” Mauricio said. “He’s never asked.”

Mauricio simply signed his name on a sheet of paper at the beginning and end of each shift with Martin’s; that’s how hours were tracked.

Once, his last name was spelled incorrectly on his paycheck. The clerk at a grocery story near his home cashed it anyway.

Mauricio is married to an American; the couple had a daughter two years ago. He desperately wants to become a citizen.

A lawyer told him to hope the laws change to allow more leniency for workers who came here illegally. His advice for the interim: Obey the law and pay taxes.

Mauricio met with an accountant to try to figure out how to pay taxes for work done with Martin, he said. The accountant told him that he needed a W-2 or 1099 form.

Mauricio said he called Martin’s Bricklaying to ask for one but was told nothing like that existed for him.

The job at Kenan Stadium

Mauricio would rather work for a company that withholds taxes, but such jobs have been hard to win since 2010.

Each time he’s laid off from one of his preferred companies, Mauricio calls Martin’s Bricklaying to ask for work.

His plea is always met with a yes.

Martin’s company does steady business. Right now, the company is building a school north of Raleigh as well as a children’s hospital expansion at Vidant Medical Center in Greenville, which is affiliated with East Carolina University.

Over the winter of 2010, Mauricio worked for Martin’s Bricklaying on the $70 million renovation of UNC-Chapel Hill’s Kenan Stadium. Mauricio says he worked 13-hour days, seven days a week to keep the project on schedule. After two months, he felt like a stranger to his infant daughter.

The Educational Foundation, also known as the Rams Club, funded the project and hired general contractor T.A. Loving to manage it and vet the subcontractors. John Montgomery, executive director of the foundation, said that Martin’s employees didn’t work directly for the foundation and that it had no way of knowing of any problems.

“We don’t have anything to say one way or another,” Montgomery said.

Mauricio shakes his head when asked whether he had ever thought of reporting Martin’s business methods to state officials.

“I don’t want to have no problems,” he said. “When there’s nothing else out there, you have to keep food on the table and your head down.”

Staff writer Chris Kudialis contributed.

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