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Roofing contractors that use subcontractors will have to classify workers beginning March 11, 2024, according to a new rule announced by the U.S. Department of Labor. Adams and Reese Construction Team Co-Leader and Partner Trent Cotney discusses this new rule and how it impacts the construction industry in an article published in Roofing Contractor.

“This final rule is in keeping with the agency’s proposed rule from October 2022, and it aligns with the “totality of circumstances” parameters for classifying workers,” writes Cotney. “This final rule overrides the 2021 Independent Contractor Rule, which was enacted in the closing weeks of the Trump administration. In May 2021, the Biden administration took steps to withdraw that rule, but a federal court kept it in place.”

Cotney added that there are six factors to consider when determining if a worker should be categorized as an independent contractor or an employee, including:

  1. If the worker has an opportunity for either profit or loss.
  2. What investments are made by the employer and the worker.
  3. What degree of permanence the working relationship has.
  4. The nature of the work and the degree of control the worker has over it.
  5. If the work is integral to the employer’s business.
  6. How the worker’s skill and initiative are utilized.

The DOL has published FAQs on its website for more information.

“Determining if a worker is a contractor or employee can be challenging, and making the wrong classification can be costly,” writes Cotney. “One of the most confounding factors regards whether the work is integral to the business. In many ways, subcontractors obviously perform critical work, whether they are roofers or gutter installers, but classifying all of them as employees seems unreasonable.”

Click here to read the article