Building executives know the ramifications of employing workers who are not U.S. citizens. But not many of them think about the implications of hiring legal workers who don't speak English.
JLC's Shawn McCadden takes a look at the risks that builders face when their employees or subs don't understand English. First off, he says, it means that customer service will be compromised due to communication challenges. And second, if a sub or his workers cannot read written contracts and work orders because of a language barrier, someone outside the subcontractor’s business will have to explain what is to be done and how it is to be done to the subcontractor. And in the absence of the subcontractor at the jobsite, someone will need to explain and direct that sub’s employees. This type of relationship with a sub and or the sub’s employees demonstrates control by the business that hired the subcontractor.
Why is this a problem? Because it raises a red flag with the IRS:
This type of relationship with a sub and or the sub’s employees demonstrates control by the business that hired the subcontractor. The IRS will consider a worker to be an employee unless independent contractor status is clearly indicated by the relationship between the worker and a remodeling business. The way the IRS sees it, an employee is a worker who performs services at the direction of an employer. Subcontractors are considered to be in business for themselves and work under their own direction. So simply stated, anyone who performs services for a remodeler is an employee if the remodeler can or does control what will be done and how it will be done. Explaining things to a worker and orally directing how and in what order to perform the work therefore makes the worker an employee. The fines and penalties for misclassification can ruin your business.