As OSHA attorneys, we often hear from our clients that OSHA cited them for the acts of their subcontractors or independent contractors. Generally, an employer is not liable for the acts of its subcontractors or independent contractors, but there are exceptions. One exception is under OSHA’s “multi-employer policy,” which we will discuss in another blog. The other exception is when the subcontractors or independent contractors are not independent at all and are used by the employer as de facto employees.
OSHA uses many factors to determine whether there is an employer/employee relationship between the hiring party and the independent contractor. These factors help evaluate the hiring party’s level of control over the manner and means by which the work is completed. OSHA will typically use two tests that incorporate these factors: the common law test and the economic reality test. Ultimately, both tests are used to assess the degree of control present between the parties. A list of the most relevant and more heavily weighted factors include the following:
- What is the degree of skill and independent judgment the hired party expects the independent contractor to exercise?
- What party supplies the tools and equipment needed to complete the work contracted for?
- Does the hiring party have the right to assign additional projects to the independent contractor?
- What is the method of payment?
- Who receives payment?
- Is the work a part of the regular business of the hiring party?
- Does the independent contractor receive employee benefits?
- What taxes are the hired party paying that relate to the hiring of the independent contractor?
For example, if the “independent contractor” is a person—as opposed to a business entity—and does carpentry work for an hourly rate under the direction of the hiring party—who also does carpentry work—OSHA will likely treat that “independent contractor” as an employee of the hiring party for purposes of issuing citations.
In short, if a hiring party treats its “independent contractors” as employees, OSHA will too. If you are involved with an OSHA inspection and are dealing with this issue, please call (312) 894-3322 or fill out our contact form for guidance on moving forward.