while being well intended, created an ex-
pensive outcome.
QR : Attorney Berenson makes reference to
both a W-2-based employee and 1099, which
we assume comes from independent con-
tractor status. Are both compensation sys-
tems in common use within the industry?
DAVE: For many years remodelers/home
improvement contractors treated their in-
stallers and frequently their salespeople as
protect contractors from getting tagged for
misclassifcation. Among other things, indi-
vidual states have enacted rules regarding
the application of independent contractor
status. I can think of no better example
than the class action suit against Lowe's
(see the next page) in the matter of employee
misclassifcation in the state of California.
Certainly they were advised by their at-
torneys and tax experts, yet the record
clearly indicates that many of their interac-
tions with these independent contractors,
independent contractors. Often the latter was
with the "well intended" advice of their attor-
ney and accountant. In almost all cases (as
measured today) the manner in which this is
accomplished adds up to "misclassifcation"
by various government agencies.
Don't be misled by information asserting
that big companies get away with treating
employees as independent contractors so your
position is secure. In the past 18 months nu-
merous large companies lost "class action
suits," among these an action in the state
of California against Lowe's. The suit was
settled for $6 million. (You can check out the
public records.) Even the smallest company
that employs independent contractors for
sales or installation should examine their
methods now and get advice from an indus-
try-specifc attorney.
QR : We see within the industry numerous
methods for compensating salespeople or
Don't be misled by information
asserting that big companies get away
with treating employees as independent
contractors so your position is secure.
38 SPECIAL SECTION: HOME IMPROVEMENT PRO | October 2015 QR QualifiedRemodeler.com
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