As I was saying …
Beware the use of independent contractors
Roofing contractors, similar to all construction contractors, have become accustomed to using subcontractors to perform a variety of services roofing contractors are not equipped, for whatever reason, to do.
More recently, this practice has extended to using "independent contractors" to perform even routine roofing work. One reason for this is the difficulty many roofing contractors have finding qualified, full-time workers.
However, recent actions taken by three federal government agencies demonstrate this practice is under broad attack. Professional roofing contractors need to be aware of these dangers, consult with knowledgeable labor attorneys and proceed carefully. The most telling recent actions are these:
- The Department of Labor's Wage and Hour Division issued an interpretation changing the classic test for independent contractor status. The new interpretation focuses on the economic realities of the work arrangement and whether the worker is "economically dependent" on the company with which he or she has contracted. When issuing this interpretation, Wage and Hour Division Administrator David Weil said: "[By] applying the economic realities test in view of [this definition], most workers are employees. "
- More recently, the National Labor Relations Board issued a decision that essentially states a staffing agency, franchisor or contractor that reserves the right to make decisions affecting a worker's employment (even if the entity doesn't actually exercise that right) likely will be considered a joint employer.
- And the Occupational Safety and Health Administration (OSHA) also has gotten into the act, seeking to cite franchisors for infractions that occurred at franchisees' workplaces. OSHA appears to want to treat franchisors as employers regardless of the details of the franchisor-franchisee relationship.
These are all huge red flags for our industry, and all deliver the same message: It will be harder to claim those who are doing work for you are not employees as defined by the Fair Labor Standards Act and, therefore, are entitled to everything your regular, W-2-eligible employees receive.
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