Misclassification of workers as independent contractors can be a costly and embarrassing event. In an article published in The Journal of Light Construction today 27 Connecticut contracting companies were issued stop work orders for worker misclassification.
In a recent article from Mason and Mason Insurance Heather Clement provides a few tips for Massachusetts contractors to avoid misclassification nightmares. In her article she states:
"Understanding the difference between an “employee” and an “independent contractor” can help you to avoid becoming the legal employer of a contractor’s or a subcontractor’s workers."
Massachusetts Independent Contractor Law 
Challenges For Mass Contractors and Remodelers
In the recent economic downturn many contractors shed their employees. Now in 2013 we are beginning to see a significant increase in remodeling activity. Current remodeling clients are seeking to hire to meet the demand for more work. (4 Lead Carpenter Job Positions Available)
Some contractors are considering hiring sub contractors in lieu of employees. The challenge is to make sure you don't hire what you think is a independent contractor sub and later find the State of Massachusetts calls them an employee!
In Massachusetts the DIA (Division of Industrial Accidents) routinely visits job sites and inquires about everyone who is working on the job site. If they find workers not covered under the proper insurances the general contractor often ends up picking up the tab for workers compensation. The DIA can and will shut down a job if they find workers are not covered by workers compensation insurance. Tom Messier of Mason and Mason Insurance told us many jobs were shut down last year because contractors did not having workers compensation on workers on the site.
In addition they often refer the contractor to other state agencies like the DOR (Department of Revenue) for further investigation on payroll tax issues.
To learn more here is the Mass Independent Contractor Law from the state web site: to make sure you are in compliance it is recommended that you check with an attorney familiar with the law and residential contracting before you bring on an independent contractor.
Section 148B. (a) For the purpose of this chapter and chapter 151, an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless:—
(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
(2) the service is performed outside the usual course of the business of the employer; and,
(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
(b) The failure to withhold federal or state income taxes or to pay unemployment compensation contributions or workers compensation premiums with respect to an individual’s wages shall not be considered in making a determination under this section.
(c) An individual’s exercise of the option to secure workers’ compensation insurance with a carrier as a sole proprietor or partnership pursuant to subsection (4) of section 1 of chapter 152 shall not be considered in making a determination under this section.
(d) Whoever fails to properly classify an individual as an employee according to this section and in so doing fails to comply, in any respect, with chapter 149, or section 1, 1A, 1B, 2B, 15 or 19 of chapter 151, or chapter 62B, shall be punished and shall be subject to all of the criminal and civil remedies, including debarment, as provided in section 27C of this chapter. Whoever fails to properly classify an individual as an employee according to this section and in so doing violates chapter 152 shall be punished as provided in section 14 of said chapter 152 and shall be subject to all of the civil remedies, including debarment, provided in section 27C of this chapter. Any entity and the president and treasurer of a corporation and any officer or agent having the management of the corporation or entity shall be liable for violations of this section.
(e) Nothing in this section shall limit the availability of other remedies at law or in equity.
