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Chesto Means Business

Former union boss continues crusade at Harvard with new labor report

As a union boss, Mark Erlich became known for his efforts to help authorities crack down on construction companies for labor abuses such as misclassifying workers as independent contractors or illegally paying them under the table.

Some of those bad actors must have breathed a sigh of relief two years ago. That’s when Erlich finally retired from his influential job running the New England Regional Council of Carpenters, and moved on to the confines of academia.

Maybe they shouldn’t get too comfortable. Erlich quietly continued his crusade, though it no longer involves picket-line signs or giant inflatable rats. Erlich instead spent the past year researching and writing a report on payroll fraud with coauthor Terri Gerstein, a former labor law enforcer in New York, for Harvard Law School’s Labor and Worklife Program.

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Erlich and Gerstein head to the State House on Wednesday to talk about the report, with Attorney General Maura Healey at their side. The report is essentially a survey of various states’ best practices, and is intended as a road map for labor agencies and attorneys general elsewhere to curb payroll abuses in their states.

The report notes that the US Department of Labor has been rolling back worker protections under the Trump administration during the past two years, placing more responsibility on state agencies to get it right.

Erlich began waging war against the Underground Economy, as he calls it, in the early 1990s as a local business manager. He found numerous examples of workers being paid incorrectly as he walked nonunion job sites; many were cheated out of workers’ compensation and unemployment insurance coverage, and other benefits that come with being on a payroll.

On this issue, Erlich finds himself aligned with former adversary Greg Beeman, the president of the nonunion Associated Builders and Contractors of Massachusetts. Beeman regularly fights project-labor agreements. But Beeman says he supports strong enforcement of worker rules to ensure the reputable firms that belong to his group are not at a disadvantage when competing with contractors that don’t play by the rules.

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While the abuses continue, there have been noticeable shifts. The rise of cash payments has become a bigger problem for enforcers in Healey’s office. And misclassifications are being seen in a wide range of industries, not just construction. Think hotel cleaning crews, nail salons, factory floors. Then there’s the emergence of the “gig economy,” driven by ride-hailing giants Uber and Lyft, and all the venture capital funds that keep those companies afloat.

Another trend that can make it tougher for Healey’s office and other enforcers: the federal crackdown on immigrants. Eva Millona, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, says the “fear culture” stoked by the Trump administration deters many foreign-born workers from blowing the whistle on employers’ abuses.

The report also points out that Massachusetts has had a strong, three-part test on its books since 2004 that employers need to use before they can declare workers as independent contractors instead of employees.

Some say it’s too strong. Associated Industries of Massachusetts spokesman Chris Geehern says his group has argued in the past for a more lenient standard. The way it’s written now, he says, the law makes it almost impossible for anyone to legally work as an independent contractor.

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Erlich has heard the criticisms about the law, but he has also not heard of any enforcement actions that weren’t justified. The Harvard Law report holds out the three-part test as an example that should be replicated.

Through his role at Harvard Law School, Erlich has broadened his crusade beyond construction, and beyond New England. By trading union halls for ivy walls, Erlich could eventually end up wielding a larger influence, and leave a bigger impact.


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.