Iu2019ve been in payroll for 40 years and active in the American Payroll Association so I can give fairly accurate answer. Exact numbers are impossible report just by the nature of the problem. However that is 40% is probably pretty accurate, although I bet itu2019s low by 15 points. Southern California has always been a hot bed of gypsy builders and contractors because of the high cost of housing. Roofing and siding are another big area. How many people do you know that hire a guy to do their yard work instead of instead of a lawn care service. Throw in maids and cooks. Day labor lots are all over south California. Guyu2019s standing around to get hired for 7 - 8 dollars an hour cash.The others are buying stolen identities.A stolen identity complete with all paperwork can be bought for under $100. Usually handled at check cashing stores, pawn shops, small bordagas. You can now get hired anywhere. But you can still get around taxes. When getting hired using the stolen ID, you fill out the W-4 like this. No federal or state income taxes will be deducted.Come tax time you get a W-2 for the amount made zero taxes. Now two years from now the IRS will match this W-2 to the person whose identity was stolen. He will get a letter saying he didnu2019t report all his earnings and is in big trouble. It eventually gets fixed Mr Stolen ID is cleared Mr Illegal Alien is long gone and country is out the taxes. Iu2019m in Pennsylvania so I only got one or two a year being so far from the border. From what Iu2019ve read in the American Payroll journal itu2019s a big problem on the border.