Subcontracting, a very common business practice, will become virtually unworkable. The National Labor Relations Board recently decided that businesses that “indirectly” control employees’ working conditions also legally employ them. Most media coverage has focused on how this decision affects franchises, but the ruling goes far beyond them. If it stands, it will make contracting and subcontracting almost impossible.
The case before the NLRB dealt with a recycling plant, Browning-Ferris Industries (BFI). Browning-Ferris paid another company, Leadpoint, to sort recycling materials. Leadpoint employees separated paper, plastic, glass, etc., on conveyor belts. These conveyor belts fed into recycling equipment, which BFI employees ran.
Leadpoint’s staff decided whom they would hire and fire, what the employees would earn, and what shifts they would work. They chose whom to promote and whom to discipline. BFI, in turn, decided what hours their plant ran, which lines would run each day, and how fast the conveyor belts moved. BFI also monitored Leadpoint’s quality and performance. BFI once caught a Leadpoint employee drinking a pint of whiskey on the job and asked for his termination.
The NLRB decided that this constituted enough “indirect” control to make BFI a co-employer of Leadpoint’s workers. If they unionize, the union will bargain jointly with both companies..................."
“They chose whom to promote and whom to discipline. BFI, in turn, decided what hours their plant ran, which lines would run each day, and how fast the conveyor belts moved. BFI also monitored Leadpoint’s quality and performance. BFI once caught a Leadpoint employee drinking a pint of whiskey on the job and asked for his termination.”
Through the years the IRS and Labor Board have increasingly tightened the noose around business owners (and companies) who hire anyone as an independent contractor. I’ve watched these rules grow in complexity since I started my business back in 1979. Back then many individuals were classified as independent contractors and I used their services in the course of business......BUT NOT ANY LONGER.
The IRS has “filters” in place to determine who is an independent contractor and who is an employee. It’s almost impossible to have anyone work for you as an independent contractor any longer.
Simple things like providing them tools, telling them when to work, having disciplinary control over them, providing a place to work, and in essence, ANY control over them other than paying for their services...and that is controlled by our now famous IRS form 1099.
Our legal system is deeply involved in the tort end of the contractor/employee legal goldmine as well as our politicians and labor union thugs.
“I don’t think we are in Kansas any more.”