AG Nessel, lawmakers outline plan to curb payroll fraud


Michigan legislators are introducing proposals designed to protect workers, taxpayers and legitimate businesses by reining in payroll fraud.

Attorney General Dana Nessel was joined this morning by Michigan House Democratic Leader Christine Greig; Michigan Senate Democratic Leader Jim Ananich; Michigan State Rep. Mari Manoogian; Michigan State Sen. Erika Geiss and others.

The legislation follows the creation of a special payroll fraud enforcement unit within the Attorney General’s office to investigate and prosecute cases of payroll fraud. Attorney General Dana Nessel announced the creation of the new unit in April.

According to a Michigan State University study, payroll fraud robs workers and Michigan taxpayers of hundreds of millions of dollars in lost wages, benefits and tax revenues every year.

Unscrupulous businesses stole an estimated $429 million in wages and overtime pay from Michigan workers between 2013 and 2015, impacting more than 2.8 million workers, according to an analysis by the Economic Policy Institute. Meanwhile, payroll fraud costs Michigan taxpayers $107 million a year in lost tax revenue when businesses misclassify workers as self-employed independent contractors or paying them off the books, a Michigan State University study found. According to the U.S. Treasury, the United States loses $45.6 billion every year because of payroll fraud, which affects one in five U.S. households.

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