Issue link: https://read.dmtmag.com/i/196134
22 • NOVEMBER 2013 • WORLD FENCE NEWS Subcontractor working agreements different than those for employees BY TOM LUBY, PROFIT BUILDERS INTERNATIONAL AUTOMATED RAIL MACHINE PUNCH, DRILL, AND NOTCH RAILS ROBOTIC FENCE WELDERS >WESTERN STYLE >SENTRY >PUNCH RAIL BASE PLATE WELDER ROBOTIC PIPE FRAME WELDER WELDER CUSTOM DESIGNED ASSEMBLE MACHINES AND WELDERS RUMPF Automation P.O. Box 20038 Bradenton, Fl. 34204 Phone (845)750-9810 autoblaze@aol.com Recently we talked about helping your crews work smarter and developing "labor standards" in your fence company, but that is not the entire labor picture. Many fencing contractors use subcontractors in their work schedule and, unlike direct labor employees, subcontractors naturally need to be handled differently. The first step is to identify what is a "true" subcontractor and exactly how do they differ from direct labor employees. Yes, how they are paid is the first obvious difference – strictly by the job and never by the hour – but what else? Naturally there is the employment and withholding tax issue, which is very important and can, if misused, result in thousands of dollars in fines, or even worse. Also – and this is very important – when, if ever, can a subcontractor be confused with a direct labor employee, if only in the eyes of the government, allowing them to collect unemployment compensation benefits against your company? Most employers are aware of the federal tax issues, but never think about the possibility of their subs collecting unemployment benefits on a state level. Nevertheless, more and more subs in the fence industry are filing for unemployment benefits, and more and more they are being granted that ben- efit, in spite of their supposed work status as an independent contractor. How can you be sure your subcontractors are following all the rules and how can you best protect your company from intended or unintended tax fraud and protect your assets from misuse and waste when employing independent subs? I am going to be writing over the next several months about subcontractor policies and procedures, and examining viable management systems for you to consider when working with your subs. In general, if the employer retains the right to dictate how the work should be done, the worker is an employee. If the employer decides what work the worker will do and how the worker will do it, then the worker is considered an employee. In March I will be putting it all together, so to speak, in a very important and comprehensive educational seminar at FENCETECH 2014 in Las Vegas. It will concern subcontractor work agreement policies and how to make them "work" for your company. The first step in determining work status for your subs is to examine your company's classification of workers