Worker misclassification in the construction industry is a widespread problem that can have severe consequences for employers. Department of Labor (DOL) compliance is important, and a recent uptick in the volume of investigations specifically targeting contractors has put the industry on high alert. Before you find yourself wrapped up in a DOL hearing without sufficient legal representation, consult a Florida construction attorney who is well-versed in the labor laws that most commonly affect the construction industry.
Something as simple as misclassifying an employee as an independent contractor could result in you breaking federal labor laws including the Fair Labor Standards Act (FLSA) or Davis-Bacon Act (DBA), resulting in steep financial penalties or even imprisonment. In this editorial, our Florida construction attorneys will discuss four of the most common worker classifications to help you get a clear idea of where you and your workers stand in the confusing web of information that makes up our country’s labor laws.
1. Temporary Employees
Employees sourced from agency, leasing, or staffing companies are often designated as “temporary employees.” These employees are technically not under your employ. They are employees of the staffing company that is “lending” them to your project. Regardless, you have to be diligent about the exact capacity of the labor they provide. You could be considered a “joint employer,” which means you are legally responsible for any discriminatory acts your supervisors commit against these employees. Temporary employees have relatively little job security and no fringe benefits through your firm.
2. Independent Contractors
Bonafide independent contractors are not considered employees. Therefore, the lionshare of federal and state laws that protect conventional employees do not apply to them. Independent contractors are considered “self-employed,” which means companies who utilize their services do not have the right to directly mandate or supervise an independent contractor’s time, work performance, method of work, job-related tasks, and working conditions. The relationship between an employer and an independent contractor is minimal, hence the “independent” nature of such a role. To determine whether or not a worker qualifies as an independent contractor, consider the following:
- What Level of Control Does the Employer Possess? If the worker has autonomy over their work-related tasks, they may be considered an independent contractor.
- Can the Worker Partake in Unrelated Projects? If the worker is permitted to work on multiple projects under different employers simultaneously, it is likely that they qualify as an independent contractor.
- Does the Worker Utilize Their Own Resources? If the worker is required to supply their own equipment and their own expense, they may be classified as an independent contractor.
Essentially the polar opposite of an independent contractor, employees are generally those workers whom you have hired directly or “at will.” The employment-at-will doctrine, which is utilized in most states, establishes that the employer and the employee both have the ability to terminate an employment relationship at any time without cause. You both possess the ability to come and go at will, as long as the grounds for your termination don’t violate the law. That said, employees who are terminated without just cause may be entitled to unemployment compensation benefits.
As an employer, you will be responsible for supplying your employees with the tools, equipment, and gear they need to perform their jobs safely. You will also be responsible for compensating them according to the federal minimum wage or the local prevailing wage, whichever is higher.
Remember, you can terminate the employment of a worker at any time if they are classified as your employee, even if the grounds for their termination seem “unfair.” Thousands of employees across the country lose their jobs every year as a result of the employment-at-will doctrine, which renders them incapable of seeking a legal remedy for their plight. While this provides employers with unparalleled flexibility to craft the ideal workforce, hiring and firing too liberally can cultivate a negative reputation for your firm that makes it difficult to put together a team during the existing labor shortage. Employers cannot terminate an employee on the basis of gender, religion, ethnicity, and other factors such as this. Additionally, you cannot be terminated if you had to take time off to participate as a member of a jury.
4. Union Employees
A union employee’s rights are determined by the collective bargaining agreement established between their union and employer. This agreement, oftentimes referred to as a CBA or simply a contract, dictates what actions you can take and the circumstances in which you can take them. For example, the CBA may affect whether or not you can terminate or demote an employee at will, which is the case for non-union employees according to the employment-at-will doctrine we mentioned in the last section.
As an employer of union employees, you will generally be responsible for formulating a “just cause” for terminating employment. You may need to provide and record written warnings to illustrate your cause for terminating one of these employees. In some cases, you will have to rely on progressive discipline methods to inform these employees of industry best practices and prevent them from derailing a project per the CBA. When a grievance arises, you may need the services of an arbitrator to reach a final resolution. Our Florida construction lawyers offer arbitration services to help you reach an amicable outcome that is enforceable in court.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.