The Law of Unintended Consequences

In 1688, when insurance was discussed in Edward Lloyd's coffee house on Tower Street in London, nobody could possibly have imagined the complications caused by insurance in the 21st century. No, I am not talking about the current debates over healthcare reform, I am talking about unforeseen safety issues caused by workers compensation and general liability issues on the construction jobsite.

For years, I have been aware of the issues of skyrocketing workers comp costs, third party liability and independent contractors. But, the front line impact of these issues hit me in the head just a short time ago. What was that "slap in the face?" Well, I observed two roofers on the roof of a 3-story building - both were wearing harnesses connected to a rope that was connected to an anchor point at the peak of the roof. On closer observation, I noticed that both roofers were wearing their harnesses backwards (the d-rings were on their chests). I called to them to leave the roof, when I also noticed that they were tied to one lifeline looped through the hole in the anchorage.

As I was explaining the errors that they had made, I asked the roofing contractor foreman when these workers had been trained in fall protection and who had done the training. That's when the revelation occurred. I was informed that these roofers were not employees of the roofing subcontractor, they were "independent contractors." I was also told that these workers were required to provide their own PPE - after all, they were not employees of the roofing contractor. Each worker was his own employee. How do we expect each of them to train themselves.

I protested, as you might imagine, that the roofing contractor must train them - but that becomes an issue too. If there are 100 "independent" roofers under the direction of the roofing contractor today, tomorrow 75 of the 100 will be different individuals. How can anyone keep up with training these independent contractors? How can the general contractor (who has a contract with the roofing subcontractor) keep up with lower tier subs?

The reason for the use of "independent contractors" is not answered easily. There are many reasons, but most relate to insurance and bureaucracy. Payroll taxes, workers comp premiums, general liability costs, even inability to obtain workers comp becomes an issue.

Sure, it's easy to say "just hire a roofing contractor who uses his own employees?" But, his competition doesn't so his competitor's cost is lower, and the lowest responsible bidder gets the subcontract. Any GC who commits to using the subcontractor who use their own employees will not get the job either because their price will not be competitive. You get the idea.

I don't know how to fix the problem - and even if I did, I wouldn't have the power to do so. So, I just keep training, one worker at a time. And, I hope that they heed my warnings on the next jobsite on which they work.

Have a safe labor day!