Construction Citizen has been following this issue for the last few months and most of our efforts have been to track the progress of the laws being introduced in the various states to make misclassification a criminal offense. We have also mentioned that Congress has the opportunity to pass federal legislation under the Employee Misclassification Prevention Act introduced as HR 5107 in the House and S 3254 in the Senate.
For those of you who are using the 1099 independent contractor approach for your contingent workforce, we have found some guidelines that might help you in your efforts especially in this economy. Secure Talent, a San Francisco based 1099 compliance firm, has a white paper entitled 8 Tips for Proper Worker Classification that you will find informative. Several of those tips might have helped Whiting –Turner avoid the problems that we showed you in the latest video. Those tips for success are:
- Understand the Government guidelines.
- Use independent contractors that have an established business.
- Use independent contractors that provide services not integral to your core business.
- Create and execute appropriate contracts with each independent contractor for each engagement.
- Address worker classification for each and every project.
- Maintain audit files to support classification decisions.
- Do not engage a former W-2 employee of your company on a 1099 basis.
- When in doubt, outsource!
You can read more about these tips on the Secure Talent website.
Comments
Jim, How as employers can we
Jim,
How as employers can we be sure that our I/S is paying by the hour and withholding as well as paying the applicable payroll taxes. Also issues of overtime and insurance are something he is repsonsible for.
I'm worried as a socially responsible contractor that I have no control over 'him' doing the right thing!
Any thoughts?
Possibilities
Several ways you can approach this one.
1. Hire a firm like Secure Talent to do the verifications
2. Use Sub Guard to qualify the subs and to ensure that they too are socially responsible.
3. GCs could start to use biometric id cards with site cameras to do visual verifications.
4. The owners and GCs can make it happen. The owners can write into their general conditions the requirements. The GC can also demand that only workers who have been employed for a specific time with the Sub be allowed on the site. Then the onsite verifications can help make it happen.
5. Coalitions like COAA can take the lead in this process since they are ultimately responsible. Many times owners and GCs are using the excuse that I don't know who they bring on to my site as cover for not wanting to force the issue.
-Jim Kollaer
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