The State could be losing €80 million a year, or €637 million since 2007, because construction workers are forced to engage in so-called "bogus self-employment", according to the Irish Congress of Trade Unions.
Congress says that in the construction sector, there is a growing trend for workers who would be traditionally be classed as employees to be designated as self-employed sub-contractors with some denied work if they fail to accept that classification.
When workers are direct employees, the employer has to pay industry pay rates, PRSI and pension contributions for the worker.
It is often cheaper for the main contractor to hire self-employed subcontractors on a fixed fee for the job, without add-on costs like PRSI and pension contributions.
However, the worker may lose employment rights and social welfare benefits, while the state loses out on tax and social insurance revenue.
Congress quotes Revenue correspondence from July 2015 saying there are 34,000 subcontractors in the construction sector active in the RCT1 self-employed tax system, with around 27,600 or 81% operating as sole traders or self-employed.
According to Congress calculations, the loss of revenue per employee on €17.21 per-hour, working 39 hours a week for 45 weeks a year, would be €2,886.
Congress says bogus self-employment may also discriminate against good employers, who may be priced out of jobs by those paying lower wage rates to bogus self-employed workers for short term gain.
Congress has criticised the Revenue Commissioners online systems, and accuses them of failing to properly apply a 2007 code of practice to crack down on abuses.
It said that it had alerted the Revenue to the case of one principal contractor who functioned with no employees from a funeral parlour in Belfast, but had engaged several people on a self employed basis on a number of publicly funded projects in the Dublin area.
Congress General Secretary Patricia King says that as bogus self-employment is now so widespread in the construction sector, it is time for new controls, including only permitting one principal contractor per project, who must have assets, a business address in the state, and a taxation record.
She also called for a pilot project targeting bricklaying and plastering.
The Revenue Commissioners strongly disputed the Congress claims and accused the report of quoting selectively from Revenue correspondence and Parliamentary Questions.
It said Congress had not flagged to any member of the Hidden Economy Monitoring Group comprising key private and public sector players that it was preparing the report.
It said it had been engaged in dialogue with ICTU for over a year but the Congress General Secretary had failed to respond to an invitation to contract the Chairman of the Revenue Commissioners about their concerns.
The Revenue Commissioners also note that no reference at all is made to Revenue's ongoing and wide-ranging compliance initiative in the construction industry.
It rejected Congress claims that the new online system eliminated checks or that it amounted to an invitation to contractors to replace decent employment with bogus self-employment.
The statement notes that while principal contractors complete the RCT details on the system, sub-contractors are entitled to draw Revenue's attention to any concerns they have regarding any of the contract details, including the appropriateness of self-employment status.
It says that Revenue welcomes the recent announcement by Minister for Finance Michael Noonan that a public consultation would shortly be held on a range of issues relating to employment practices and trends.
The Construction Industry Federation said it did not support abuse of self-employment regulations and encourages member firms to comply with the appropriate code of practice.
It said it should also be recognised that legitimate self-employment was often part of the overall mix of companies on any given construction project.
It said it supported the Revenue Commissioners' National Progamme of Compliance, as inspections were the key to ensuring best practice across the industry.