In January 2024, the Department of Labor proposed a final rule for determining independent contractor/employee status.
The Case
On June 18, 2024, the Attorney General for the District of Columbia filed a lawsuit in the District of Columbia Superior Court against a large construction subcontractor performing mechanical services work on several high-profile projects across the District. The lawsuit alleges that the company regularly violates District law to bolster its profits by intentionally misclassifying its workers as independent contractors instead of employees.
In the lawsuit, the Attorney General states that: “By misclassifying their employees as independent contractors, these companies have systemically denied the employees of their rights to minimum wage, overtime pay, and paid sick leave, resulting in unlawfully suppressed labor costs.” Such alleged illegal cost reductions not only benefit the contractor and its labor subcontractors, but are passed up through the contracting chain to all general contractors who contract with the mechanical subcontractor. Accordingly, the Attorney General included a well-known general contractor as a co-defendant, seeking to hold both the mechanical subcontractor and general contractor strictly liable for their labor subcontractors’ violations of the District’s wage-and-hour laws.
How Can Construction Companies Avoid Litigation?
Comments