I am retired from the building industry and this issue is at least 20 years old. The issue has been for example that me the boss wants to pay you a set rate per square foot, I tell you when to show up which is by normal definition a boss/employee relationship. So me the boss has 4 subcontractors working with each other each day installing roofs that I sell and arrange delivery of the materials and pay for them. Doing business this way benefits the owner of the roofing, flooring, siding, framing and other companies not their employees.
Start-ups and smaller contractors are doomed to fail; the financial impracticality of hiring W-2 employees at the outset is a death sentence. The costs are prohibitive, inevitably driving businesses into the ground. This situation is utterly preposterous. In response, I'm pivoting to the home building sector, as the roofing industry continues to evolve in ways that exclusively favor the entrenched giants, leaving no room for smaller players.
Not necessarily. We’ve had W2 staff and sales reps from the very beginning, and we started our business right before Covid broke out in late 2019 and we’re still going strong. We made the choice to do W2 because we made a guess that stuff like this would be coming up in the future, and thought it would be better to deal with it earlier on than later. That being said, I agree that its preposterous (the government needs to cool it in more ways than one) and I also agree that it will create some additional challenge. However, we made it through so I don’t think it’s going to be a complete disaster for startups. They’ll just have to adjust.
@devongray7015 You guys made it because you had money. I'm talking about your average person who DOES NOT have money to sustain a salary, and it is barely creating its customer database. If you do not have money in the bank and have 2-3 customers how do you expect to pay a W2 salary? Yep. This is what I am talking about
Why should the government force me to have more than one source of income if I’m starting my business or self employed I need experience handling one thing at a time right now this is horrible
Here's a more detailed explanation of the Economic Reality Test on the DOL website that breaks down the 6 question: www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship
A don't find any mention of how one would be considered an employee if 90% of their income comes from the business with which they're contracted. Am I missing something?
Good these companies need to be put out of business. They are really just sales companies not contractors. It’s to hard to compete with these companies doing it legitimately paying all the social security, employment security, higher liability insurance rates,unemployment, and all the other costs of having employees.
It’s all about the government controlling us from the womb to the tomb. Anything from the government that says it’s here to help you is the time you need to be scared.
as a sales rep currently i only do roofs part time and do not economically depend on the roof sales. i might be in the clear then. but of course i would have to consult an attorney
So the 1099 contractor has been basically paying both sides of the income tax but if they are found to actually be an employee, the company has to pay their portion of the taxes for all those years? So that means the 1099 contractor will get a refund for all the extra taxes that they have paid too?
That's a great question but I don't the answer whether or not it would change anything for the 1099 person. I'll put that on my list to chat with the attorney about.
@@TheRoofStrategistplease do!!! We didn't want the sub screwed even if the company is screwed and the IRS to steal $ on both ends. There must be an appeal process
It appears that the solution is for 1099 contractors to have other income streams and not just the single roofing company. The other streams could be other roofing companies or other businesses.
Maybe not entirely. It's a good thought, but in practice when you look at my post breaking down the 6 question assessment of the "economic realign test" you'll see that most 1099 positions will fail that test.
In Maryland, a salesperson licensed by the home improvement commission can only sell for 2 companies if both companies agree, in writing, to share the salesperson's efforts.
2024 has not been a good year in roofing so far. I have 20 years in the business and my dad is going on his 50th year and it’s never been so hit and miss in our area. Might be covered up for a month or so then all of a sudden nothing for weeks at a time. I hope it turns around and fast
Many companies force independent contractors to agree not to work for their competitors. But if they're treating us like employees, we deserve the same benefits: health insurance, retirement plans, fair pay, and protection if we get sick or need time off. It's unfair that they don't want to pay for these things. For instance, sales reps who work on commission often have to pay for everything themselves, like travel expenses and training, without any financial support from the company. Companies have been taking advantage of independent contractors for years, so it's good that the government is stepping in. Additionally, sales reps can end up working long hours without getting paid extra for overtime or base pay which adds to the unfairness of the situation.
That's the idiots who are lobbying for this, the unions. They want the 1099 gone, want them all employees, then play the other side and unionize them. It's sick.
NOT US!!! If you run 1099 reps you don't own your sales force, PERIOD... not throwing shade, it's a fact. Yes, it's harder financially run a business with w2 commission reps, in my opinion we made the right call and being that we didn't operate in the gray, it's business as usual for us.. Not to mention we fully control territory and performance, no stragglers here, only guys/gals that perform stick around, which is tremendous for culture....
Flood gates are open at our border, but the hard-working people coming for an opportunity cannot be hired W2 and now cannot be 1099 either. The government's greed and their policies really don't align.
If it’s enforced equally yeah ! Look at the trucking industry as an example and we’re screwed. They can drive forever without a logbook until they hit the United States line, and then they start their logbooks. Many examples, different industries, where the laws are not equally enforced.
And how in the world is a business supposed to know if an independent contractor is making 90% or more of their income from a single source? Are we supposed to ask our independent contractors? What if they lie? This seems unenforceable on its face.
Actually it's not that difficult for a small company. If you have 5 guys working for you and they're there most of the time you know if they're lying or not. If you're a huge roofing company band have 10 crews it might be a problem but you're also likely making enough money to pay actual employees with benefits etc instead of having a sub contractor relationship.
@@infinityroofer Sure, I hear you. Biden has a part to play. I felt that way myself, but I found the staple question is who gave the DoL the scope to make these decisions? Congress. They left the FLSA vague in regards to IC definitions. The only meaningful avenue of concrete change that we can control is the legislative bodies who write the laws.
@@infinityrooferyou’ll get your Kharma. Might not happen in this life but it will come. Don’t need to worry about trying to pry money out of you. Only good thing about the ruling is it screws guys like you who have spent their entire career running shell offices off the backs of 1099 “independent contractors”.
So how am I supposed to know if my 1099 guys pass the 90% mark? I’ve always treated them as independent contractors. Work when they want. Where they want. For whoever they want. They choose to work under my company name due to high commission pay and treating them fairly.
This is my question @theroofstrategist Does this apply to all independent contractors unilaterally. Does an individual classify as an employee where a LLC or SCorp is still considered an independent contractor ??
@brandonwegner6952 It matters if you're paying to a SSN or TAX ID . There's a difference between both. Besides, every state has the requirements to be an independent contractor, one of them having GL.
Yea it does. Read my other comment where link to the detailed Economic Reality Test that the DOL posted. Just because they have an LLC doesn't make it OK. It doesn't really matter in their eyes. What matters is the language in the test to determine their classification as an employee or independent contractor.
Start here www.federalregister.gov/documents/2024/01/10/2024-00067/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act And see my other comment here with the link to the Department of Labor breakdown.
BECAUSE I DONT WANT TO BE A EMPLOYEE I WANT TO CONTROL MY SCHEDULE MY LIFE AND MY MONEY, I’m fine signing a non compete if the contract is a good deal for me and for my client and when the contract ends or we can negotiate new terms if I decide I want to diversify my client base which why would I be a employee when it does nothing but hurt my client I’m runnin the business of selling my skills to the highest value client I don’t need 5 terrible clients I need 1 good one and if it goes bad, boom I’m my own business I don’t loose my benefits for quitting a job because all I did was drop a client
hey, at least you don't have years worth the investment and/or tons of sales guys to have to fire or turn into employees. This doesn't look pretty for anyone, tho.
It'll cost less. Subcontractors just need to hire a business person to run their business and they won't need "contractors" to work for. Most real roofers are around 50, which makes their kids 20-30, and they've been through the education system and are bilingual. When the crews are making money off the sale and install, they'll be able to do business for much cheaper.
If ever there was an industry more worthy of intense scrutiny and regulation..here it is the "roofing industry". Scary part is the roofing industry is rapidly moving into solar power panel installation...somewhat declining in influence within the siding industry. All sectors rely heavily upon legal and illegal immigrant labor, generally defined as "underground" labor. An exploited labor force incapable of exercising fair labor practices.
that's the other side of the problem. Those who can have a business, but hire undocumented guys, are gonna be in deep even more. I can't even think of the repercussions yet, but for starters, how in hell are these guys gonna pay overtime, health insurance, ss contribution and all that jazz, for so many guys. That bill is gonna come to us, which will be passed on to the consumer and carriers. This isn't but more inflation and taxes. Seems to me like we have to front more war money.
I know a lot of 1099 reps who will be really upset by this. They are loosing all of their deductions, autonomy, and increased retirement account options. And will take a payout because of it - and have to pay more in taxes. Not all companies are exploiting their people.
@@TheRoofStrategist A worker is entitled to minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA) when there is an employment relationship between the worker and an employer and there is coverage under the FLSA. Employers are responsible for determining whether a worker is an employee under the FLSA. Misclassification occurs when an employer treats a worker who is an employee under the FLSA as an independent contractor. Misclassifying employees as independent contractors is a serious problem because misclassified employees may not receive the minimum wage and overtime pay to which they are entitled under the FLSA or other benefits and protections to which they are entitled under the law.
@@TheRoofStrategist Many companies force independent contractors to agree not to work for their competitors. But if they're treating us like employees, we deserve the same benefits: health insurance, retirement plans, fair pay, and protection if we get sick or need time off. It's unfair that they don't want to pay for these things. For instance, sales reps who work on commission often have to pay for everything themselves, like travel expenses and training, without any financial support from the company. Companies have been taking advantage of independent contractors for years, so it's good that the government is stepping in. Additionally, sales reps can end up working long hours without getting paid extra for overtime or base pay which adds to the unfairness of the situation. government got involved.
You're not looking at the big picture and honestly, you're thinking as an employee, which sales guys do not like to be considered as. Watch how much they'll cry when they get those big tax deductions on every check. There isn't much a W2 employee can write off. So, in all honesty, they have been making a pretty decent living, saving tons with the write offs, putting that money into their homes and other side businesses. Now that money is gonna go straight to the government. It would be helpful if you looked a LOT more into it to understand the size of the problem for this and other industries. Including for those who want to venture out doing other things besides roofing sales. If you rather be a W2 and live paycheck to paycheck, than you're probably in the wrong channel. No offense, but none of us care for this law, as most have an entrepreneurial mindset. A business owner or someone that works for commission only, don't mind working extra hours. We don't have a 9-5 thinking. That's just insane to even consider. Sales have no hours. You sell when you talk to your friends, neighbors, ppl at the store, etc. A sales person never stops selling! How are you gonna say 'I worked 15 min at Walmart selling a roof for you, boss' .... what are you, a lawyer charging per hour? lol High commission based sales is a whole different animal, and not meant for everybody. @@nandz3349
@@c.m.2747 Having worked in sales for 15 years, it's clear to me that what many companies are doing is problematic and predatory. That's why government intervention has become necessary due to numerous gray areas. I anticipate a wave of bankruptcies and criminal charges in the future, and frankly, I'm eager to see justice served.
Well, then let's talk salaries and not commissions. The contracts would also change. This is not beneficial to anyone. I wouldn't have a W2 'employee' making 1/2 the profit. They can make min wage plus commission, but it wouldn't be the same pay structure, as the employer would now have to pay insurance and match their ss contribution. It will definitely change it all.
