Construction contractors and subcontractors across Massachusetts continue to face heightened scrutiny over workers’ compensation compliance as state officials pursue enforcement actions tied to employee and subcontractor classification practices.
The Massachusetts Attorney General’s Office announced that Edwin Santiago Bueno, owner of Milford-based ESB Construction Inc., was indicted by a Worcester County grand jury on multiple workers’ compensation insurance fraud charges along with a felony larceny count connected to alleged premium avoidance practices.
According to prosecutors, the investigation focused on workers performing roofing work between 2020 and 2023 who were allegedly classified under lower-risk trade categories for insurance reporting purposes.
State investigators allege ESB Construction misrepresented the scope of work performed by subcontractors by categorizing roofing labor as siding or painting work. Workers’ compensation insurance rates in construction are heavily influenced by trade classification due to differing risk exposure levels across scopes of work.
Authorities stated that the alleged misclassification resulted in approximately $20,194 in avoided workers’ compensation insurance premiums tied to coverage administered through Travelers Insurance on behalf of Ace American Insurance Company.
The Attorney General’s Office said the alleged reporting practices occurred over multiple policy periods spanning roughly four years.
The case originated after Travelers notified the Insurance Fraud Bureau of Massachusetts regarding potential inconsistencies involving ESB Construction’s reported work classifications.
Investigators subsequently reviewed construction activities associated with the company and determined that roofing operations had allegedly been performed while subcontractors were reported under less expensive insurance classifications.
The case is being prosecuted through the Attorney General’s Insurance and Unemployment Fraud Division with support from the Insurance Fraud Bureau of Massachusetts.
Bueno is scheduled for arraignment in Worcester Superior Court on July 14, 2026.
Workers’ compensation classification remains a significant compliance issue throughout the construction industry, particularly among roofing, exterior envelope, and specialty trade contractors where premium differentials between labor categories can be substantial.
Insurance carriers, state regulators, and labor enforcement agencies continue increasing audit and verification efforts tied to payroll reporting, subcontractor status, and trade classification accuracy. Construction owners and general contractors are also facing greater pressure to validate subcontractor compliance documentation as part of broader risk management and procurement oversight efforts.
The case underscores the financial and legal risks associated with inaccurate labor classifications in construction insurance reporting.
For construction owners, developers, and general contractors, subcontractor compliance verification has become increasingly important as regulators and insurers intensify enforcement efforts tied to workers’ compensation coverage, payroll reporting, and subcontractor oversight. Specialty contractors operating in higher-risk trades such as roofing also face continued scrutiny regarding workforce classification practices and insurance compliance controls.
Source: Mass. Gov.
