A New Jersey carpenters' union has launched a class-action lawsuit against a major U.S. homebuilder, saying the company fired union workers in order to replace them with illegal employees.

The lawsuit, brought by New Jersey's Regional Council of Carpenters, claims D.R. Horton has been using a subcontractor to hire undocumented workers since laying off higher paid union employees. The lawsuit also alleges the illegal workers are paid in cash in order to avoid payroll taxes.

"We're in the midst of a budget crisis here in New Jersey, and you're talking literally hundreds of millions of dollars [that] are being wasted in New Jersey by misclassification of employees," says Albert Kroll, the union's attorney.

According to the union, the illegal workers work six days per week at lower wages, without benefits or overtime.

"Horton preferred hiring undocumented workers because they don't complain about working conditions and don't submit workers comp when injured," says Kroll.

The union claims it has nine witnesses willing to testify to the sketchy business practices. D.R. Horton is refusing to comment on the litigation.

Carpenters? union sues major home builder