Probe finds construction trade contributing to Philly’s underground economy

An investigation by Philadelphia’s city controller is shedding light on the underground economy in the construction business.

Controller Alan Butkovitz says employers are skirting Philadelphia’s wage tax by paying construction workers in cash.


“We’ve seen people getting $100 payments in cash at 23 different construction sites that we’ve looked at,” he said. “We’ve seen copies of checks that show non-withholding of city taxes. It’s impossible to determine which workers at the site are employees at the site or which ones are subcontractors.”

Butkovitz says the city could be losing millions of dollars in unpaid wage taxes. He’s proposing ways to make it easier for officials to crack down.

“We believe things like having identifying badges on workers, which would indicate if they are a subcontractor and, if so, whether they have they have the right business license, would be a big boost to enforcing the city tax laws,” he said.

At least two City Council members are trying to clamp down on the problem through regulatory changes.

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Help us get to 100% of our membership goal to support the reporters covering our region, the producers bringing you great local programs and the educators who teach all our children.