No one can tell by looking – is that painter an employee or a sub? And what if they’re being treated as one type, but legally should be classified as the other?
Last week, the Department of Labor issued a new Final Rule to distinguish between the two.
The rule, issued January 6, included the following clarifications:
Lee R. Schroeder, Ohio licensed attorney at Schroeder Law LLC in Putnam County, further clarified this in an online article. “If the worker’s only way to earn more money is to work more hours or use the business’s resources to be more efficient, the worker is more likely to be an employee,” he wrote.
If there are still questions, the Department of Labor provided three points to clarify from here.
Schroeder adds that if your workers are performing the core service of your business, they are likely to be employees. He specifically uses painters as an example. If you hire people to paint, they are likely to be employees. A delivery driver, who works for five other contractors might fall under the sub category.
Make sure to contact your accountants and legal advisors if you have questions from here.