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Adams and Reese Construction Team Co-Leader and Partner Trent Cotney was interviewed by RoofersCoffeeShop on the best practices for contractors when hiring subcontractor companies.
RoofersCoffeeShop is an information news source and community platform for roofing and construction industry professionals. Cotney was joined on the interview by Justin Bedwell, owner of Camouflage Roofing & Construction in Oklahoma.
Cotney said construction companies should look at a variety of different factors: “They want to look at to what degree is a sub truly independent? Do they operate like a business? Do they have their own website? Do they only work for you or do they work for other people? Do they wear your gear?”
Cotney estimates that about 90% of residential contractors are using subcontract labor, while about 60 percent to 75 percent of commercial companies are using subcrews.
Therefore, understanding the different forms and classifications regarding subcontractors can be crucial to proper management. Subcontractors can either be brought on by contractors through either hiring 1099 subcrews or W-2 employees. 1099s typically promise an awarded amount for the project’s completion whereas a W-2 is often paid hourly.
It is important to understand the differences between the two employment types, especially after the March 2024 legislation that outlined six different factors that determine how a subcontractor should be classified. Roofing contractors that use subcontractors have to classify workers, according to a new DOL rule. (Read Trent’s article on the DOL rule)
Cotney recommends for contractors to analyze all decisions based on real-world factors and risk mitigation. “If you did everything that I told you to do, your accountant told you to do and your insurance agent told you to do, you'd be out of business. So, you have to factor in the real world and combine that with a legal to get within an acceptable tolerance of risk mitigation. Look at the risks involved in the different positions, such as sublabor versus sales, and make your decision based on the situation.”
At Adams and Reese, Cotney is a leading member of one of the largest construction practices in the country with the law firm’s roster of more than 90 attorneys serving the construction industry.
A Partner in the Adams and Reese Tampa office, Cotney represents construction and infrastructure clients, including general contractors, subcontractors, suppliers, manufacturers, architects, engineers, roofers, developers, and other professionals. He is an EU arbitrator for construction-related disputes. Cotney is also experienced in construction litigation and arbitration, including OSHA defense, lien law, bond law, bid protests, and construction document review and drafting.
Cotney is ranked among the top construction attorneys in Florida by Chambers USA and ranked by Best Lawyers, and Super Lawyers in Florida, Texas, Mid-South, and Illinois. Cotney is a board-certified construction lawyer licensed in eight states and Washington, DC.