With the workforce shortage still hampering the roofing industry, it’s no surprise that contractors reported an increase of 30% in subcontractor use this past year, citing labor costs and the inability to find workers among the reasons.
However, the Department of Labor’s new rulemaking on independent contractors versus employees could make this practice more difficult going forward, with a rule that will likely favor unions and be more restrictive.
“It is almost a sure-fire bet that it is going to mirror what we have seen coming out of the Biden administration to date, which is making it very difficult to classify a subcontractor as an independent contractor,” said Trent Cotney, partner at Adams and Reese.
In this Legal Insights episode, Cotney shares why this rule change will impact the roofing industry, some important dates to know if contractors want to make their voices heard and what they can do now to prepare.
The current final rule was issued by the previous administration, but was delayed and then withdrawn by the department in May 2021. A federal court in Texas ruled that the withdrawal was unlawful and that the current final rule has been effective since March 2021. The department now plans on engaging in rulemaking on the status of employee versus independent contractor.
In addition to the new independent contractor rule, Cotney warns that there’s been spikes in defect claims on both the residential and commercial side of the industry due to contractors turning to substandard products to mitigate the supply shortages. He discusses what types of products to avoid and where they can be found.
“It’s a problem because contractors are desperate, they’re trying to use whatever they can to meet deadlines,” Cotney said.