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What Defines Employer: Subcontractors
and MIOSHA Regulations
By: Robert Pawlowski, CIH,
CSP, Director Construction Safety and Health Division
MIOSHA enforces workplace safety and health regulations under
authority of the Michigan Occupational Safety and Health (MIOSH)
Act, Public Act 154 of 1974 as amended.
Employer Responsibility is
the Law
The MIOSH Act states in Section
11(a) that it is the employer's responsibility to: "Furnish
to each employee, employment and a place of employment which
is free from recognized hazards that are causing, or are likely
to cause, death or serious physical harm to the employee."
The MIOSH Act clearly places
responsibility for a safe and healthy workplace on the employer.
Section 5 of the MIOSH Act definitions include: "Employee"
means a person permitted to work by an employer; and "Employer"
means an individual or organization, including the state or a
political subdivision, which employs one or more persons.
During the investigation
of any worksite or work operation, the MIOSHA inspector must
establish an employer/employee relationship before MIOSHA rules
and standards can be applied. While the investigation is ongoing
we review contracts and written documents, and conduct interviews
to determine what the working relationships are at the worksite.
Who is an Employee?
A number of issues are considered to determine if an employer/employee
relationship exists including but not limited to; the important
issues of who provides direction to individuals at the worksite
with regard to work activity, and who provides wages to individuals
at the worksite for work performed.
Let's look at an example of a contractor hired to install an
air conditioning unit on a roof, which is construction work under
Standard Industrial Code 171. When conducting a MIOSHA inspection
at this worksite, the question of who the employer is must be
answered. If a building owner contracted with a heating and air
conditioning contractor, in most cases the building owner is
not the employer.
The heating and air conditioning
contractor would typically be the employer, because the contractor
schedules their employees to work on the project, provides direction
to the employees doing the work, and pays them for doing the
work. The contractor collecting payment from the building owner
would typically be handled separately. In this case the building
owner does not control the day-to-day work or provide direct
supervision. The building owner may or may not provide the materials
in this scenario.
The above determination would also apply if the building owner
hired an individual who practices under the auspices of a company
such as a corporation, partnership or DBA contractor. However,
if a building owner hired an individual as an individual, not
as a corporation, partnership or DBA contractor, the building
owner could be considered the employer.
There is no easy litmus test for determining an employer/employee
relationship. Some items to consider are:
Who has hire/fire authority?
Who establishes the hours of work/ schedule of work progress?
Who provides materials/equipment?
Who provides worker's compensation insurance?
Who pays the workers?
Who supervises the workers?
The "Economic Realities Test" - who stands to gain
from the efficiency of the work performed?
It is not necessary to meet
all of the above categories for an employer/employee relationship
to exist. However, MIOSHA does make a determination based on
the above parameters. It is not unusual for employers or their
attorneys to appeal a MIOSHA citation arguing that an employer/employee
relationship does not exist. MIOSHA staff also is occasionally
subpoenaed in third party litigation on this issue.
Does a Form 1009 Change the
Relationship?
MIOSHA has recently become
concerned with what appears to be an increase in employers who
issue to their employees Form 1099, and argue that the MIOSH
Act does not apply to them because all their employees are "independent
contractors." The Form 1099 is an Internal Revenue Service
(IRS) form that is used for reporting certain types of income,
and is not a factor for MIOSHA in determining an employer/ employee
relationship with respect to MIOSHA rules and standards.
We want to make it clear
to employers that how they pay their employees does not diminish
their responsibilities with regard to the MIOSH Act. MIOSHA will
be looking at the parameters outlined above to determine if an
employer/employee relationship exists.
In addition, in MIOSHA and
federal OSHA enforcement policy states that "controlling
employers" can be held accountable for the actions of their
subcontractors through knowledge of unsafe work activity or lack
of due diligence in discovery of an unsafe work practice. Controlling
contractors as well as subcontractors may have responsibility
to ensure that work activities taking place are accomplished
in accordance with established MIOSHA safety and health standards,
under multi-employer worksite provisions.
MIOSHA instructions for Multi-Employer Work Sites state that
when two or more employers are involved in work activity on the
same site, there may be MIOSHA responsibilities across entity
lines depending on the amount of involvement in the work process.
The MIOSHA instruction identifies four types of companies that
may have involvement in the exposure of an employee to a hazard.
The MIOSH Act and MIOSHA
multi-employer worksite provisions (Agency Instruction COM 04-1)
can be viewed on the MIOSHA website at www.michigan.gov/miosha.
You can also refer to: MIOSHA Issues Multi-Employer Work Site
Instruction, MIOSHA News, Winter 2005.
As you can see, there are times when there are multiple issues
to sort through to determine whether an employer/employee relationship
exists. MIOSHA is always willing to discuss these issues with
employers and employees, and encourages individuals to contact
us….
Reprinted from the MIOSHA News: Fall
2005 Issue.
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