If you own a construction company in California you will need to make use of a wide range of different types of workers to get your jobs done. This is because there is so much specialized work that nobody can be an expert on everything. Even a standard job will likely require builders, suppliers, electricians, plumbers, and many others to ensure everything is done right. When working with all these people, you need to make sure you are classifying them properly to avoid legal issues. Knowing who should be classified as an employee and who will be an independent contractor is something all construction companies need to study.
Who Can Be an Independent Contractor?
A fairly recent court decision has helped make it easier to determine who can work as an independent contractor. There is a new three-part “test” to use. Anyone who meets all three qualifications can be classified as an independent contractor.
- Control & Direction – The employee must be free from any significant control or direction from the hiring business on how they get their work done. For example, if a hiring business tells an electrician that they must run electricity from one place to another, but doesn’t tell them how it must be done, they would meet this criterion.
- Outside Scope of Normal Work – The work must be outside the scope of what the hiring business normally performs. If your business employs many electricians and does this type of work on a regular basis, you likely can’t use an outside electrician as an independent contractor on most jobs.
- Independent Business – The person doing the work must have their own independent business performing the type of work they are being hired for.
It is NOT Up to the Workers
In the past, workers would often be able to choose whether they wanted to be classified as employees or independent contractors. In the construction industry, there are benefits to being an independent contractor, such as being able to work for many different companies and choosing the work performed based on your schedule. As an employee, even a part-time employee, the worker needs to work the hours demanded by the employer. While there are groups pushing to add some flexibility back into the law on this matter, it is currently almost impossible for an individual to choose to be an independent contractor if they don’t meet the above qualifications.
Review Your Worker Classification
It can be difficult to determine exactly how someone should be classified, especially if the worker has a preference for one or the other. Having an attorney review a situation can help avoid any legal problems down the road. Contact Adler Law to set up a consultation and go over your situation right away.