Worthy reminders

Recent court cases reiterate the importance of treating employees appropriately

Your attorney probably has advised you of the potential pitfalls for misclassifying employees as independent contractors, failing to apply all company policies consistently and failing to exercise particular care when taking an adverse action against an employee who has engaged in protected conduct. Two recent federal court decisions reveal what dangers face roofing contractors who fail to heed that advice.

Misclassification

The case of Chao v. First National Lending Corp., et al. especially is important for roofing contractors who use independent contractors. If you use independent contractors, you need to ensure those workers will not be classified as employees under the test used by the U.S. Department of Labor (DOL) and the courts.

Whether a worker is properly classified as an employee or independent contractor is based on the "economic reality" of the relationship. The most common mistake made by roofing contractors is assuming compensating a worker using a Form 1099 ensures the worker will not be deemed a company employee. But job titles, labels and compensation arrangements, such as Form 1099, are not the only factors DOL and the courts consider when analyzing the relationship.

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