Contract Labor

DougK

Need some advice on contracted laborers who have been at our seed processing plant for extended periods ( over a year). Is there some risk that they may be considered our employees. I know Microsoft had some issues with contractors but don't know the details.

Carey

The IRS has a list of 20 Questions that employers can use to determine if they have contractors who might be considered employees. The IRS website has some info at [url]http://www.irs.gov/businesses/small/article/0,,id=99921,00.html[/url], but I didn't see the 20 questions. I can email it to you if you need.

DougK

Thanks for the speedy reply. I can't find the list at IRS either so if you could e-mail that would be appreciated. [email]dougk@seedsinconline.com[/email]

Carey

It's on its way.

Pork

DOUGK: I think the key question is "is the establishment of the contractor as a ligitmate enterprise"? A business card and an invoice is the documents we use to validate our use of very temporary labor. We use contract labor for very sort time projects. Spring clean-up outside usually takes about 5 days and we use several local hands to pay them by the day insuring minimum wage is covered. Fill in truck drivers who come in on-call and drive for full-time sick and vacationing drivers. We pay them by the loads, again making sure that our agreed to fee is greater than minimum wage. These drivers are also cerified, and current on all DOT driving criteria for CDL.

For long term "contract labor" projects, the establishment of the enterprise as a practicing business is paramount. Your post reads to me that this is your most important consideration. We have a long term "contract Labor" project, which calls for the loading of live animals for market. Our contractor has a team of employees who report to the loading docks and load "HOGS" going to the market. The contractor bills use weekly for the total number of "HOGS LOADED". Weekly we cut the contractor a payment for services rendered. The contractor is responsible for the payment of the crews. We do not tell the contractor how many employees to hire or for how long. Our payment to the contractor is documented, the contractor is based on a piece rate schedule; the contractor pays his crews also based on a number of hogs loaded.

Hope this might help you!

Pork

TN HR

All of this sounds like hogwash to me (no offense Porker). I think what you are actually referring to is co-employment. In Vizcaino v. Micro$oft, the courts ruled heavily for the plaintiff. However, by true definition co-employment only happens when two or more employers exert control over one employee.

Check the IRS "test" on this. The long list has recently been replaced by a very short list. It doesn't take much to pass (or fail) muster on this.

Pork

"HOGWASH" OR NOT, it does not meet the test for co-employment. I have been there and done that before; People leasing business where the temp agency owns the employee for taxes, U/I, SS, and pay and the company owns the person for the production of X-widgets, where the people leasing business never gives instruction nor production which comes from the leasing company. We thought we were clear of union drives with our production crew belonging to a leasing company and when we found one of their employees with a bad attitude we call the leasing company and they replaced that person the next day. NLRB looked at our operation and allowed every leased employee vote. We won the campaign but it cost me my job and the leasing company suddenly was without a huge income. I lost my job because I should have known better the words put into the ears of my bosses. I was promoted to the home office for 181 days and RIFFed in a reorganization. I had not filed a discrimination charge, therefore, I had to admit "HOW DUMB CAN ONE GET". My current employer is greater than an arms length from the activity of the "Contract Labor" company, he has his own FIN and pays his own taxes, SS, bendfits, and payroll.

Again I express I hope my words clarify and give you some assistance to make your own decision. Always check with your legal expert. I have and we are ok in his view and I accept his view. I watch it often to make sure we are not evolving into a much stronger relationship.

PORK

DougK

I believe what we are really talking about are leased employees. We work with the leasing company to set the number of employees that we lease and they are instructed and supervised in their jobs by our full time staff. There are leased workers who have been here doing the same thing for three years. I am worried about discrimination allegations since the leased workers are Mexican. ERISA (we have a 401k plan) is probably the biggest concern.

Pork

DOUGK: This sounds very much like the situation where I ended up losing my job. I became the "excape goat" when the NLRB came a calling. we maintained that the leased employees were not our employees and should not be allowed to vote. One of the leased company employees was a UNION plant. Since the leasing company did not have anyone on station to supervise, train, discipline, hire or terminate, then, I became the POC and in fact employer representative. A fact of reality set in, the campaign began in ernest and the company won but it took getting rid of the leasing company and the HR who dreamed up this scheme, ME. I was following the lead of the VP for HR at Corp level and put into place the program that he dreamed up, he found the leasing company, and put the operating rules together. He did not lose his position until well after I lost my job. I learned my lesson and I'll never do it again without the leasing company having a ligit BOSS on site to deal with their employees in all issues.

Your last post to which I have attached this post tells me you are sitting in the very same seat that I occupied 10 years ago!

PORK

Gillian3

If you have leased employees I doubt that ERISA will be a problem, although I am no benefits expert. The biggest issue here is that discrimination enforcement agencies may see this as a joint employer issue and if there is discrimination going on you and the leasing company will be held responsible and you get to argue with each other over who really is. The EEOC, meanwhile, will say both.