Warehousing 101: Is Your Forklift Maintenance Crew Contractors Or Employees?

Warehouses often hire contractors to perform maintenance and repairs on the forklifts in their facilities. However, in some cases, the contractors should be employees instead of contractors, which could mean that the employer is at risk of being fined hefty penalties for failing to abide by labor laws. If you own or manage a warehouse and have contractors performing duties related to forklifts or other equipment, here are a few important things to determine. 

Can You Answer Yes to Any of These Questions? 

There are specific questions that need to be answered to help you determine the status of the forklift maintenance and repair technicians. 

• Do you pay all of their expenses? 
• Do you schedule specific hours for them to perform the tasks of their jobs? 
• Do you provide them with tools and equipment to perform their tasks on the forklifts? 
• Do you give them any directions on how to perform the tasks? 
• Do you prohibit the contractor from subcontracting any of the work? 
• Do you provide them with training to perform the tasks? 
• Are they only able to work for you?

If you answer yes to any of these questions, the contractors may not be considered as contractors after all. Instead, the Department of Labor and the Internal Revenue Service may regard them as employees. 

What Difference Does Their Status Make? 

The difference between a contractor and an employee means different tax withholding responsibilities, as well as differences in the responsibilities of providing worker's compensation insurance and any other benefits, such as health insurance coverage and retirement savings plans. Contractors should be able to work independently of your warehouse operation, so they are able to have other contracts available to them. 

What Can You Do to Make Sure Their Status Is Correct? 

Since there are so many variables and requirements that need to be met in labor law, it's important to consult with a lawyer who specializes in labor laws. Gather all contracts that are in place with the contractors as well as any other pertinent documentation, such as schedules and expenditures. If the lawyer feels that you have miscategorized the contractors, he or she can provide you with solutions to remedy the problem, which will mitigate any risks of being penalized in the future. If necessary, schedule a meeting between yourself, the contractors, and the lawyer to resolve any potential conflicts moving forward, particularly if it's deemed that their status will need to be changed from contractors to employees. 

For more information, contact your local labor lawyers.