Professional License Lawyer in North Carolina

Can a Licensed Electrical Contractor in NC Hire 1099 Employees?

Can a Licensed Electrical Contractor in NC Hire 1099 Employees?

Today’s question is going to be: can a licensed electrical contractor in North Carolina hire 1099 employees? The short answer is, no. They cannot. There is one exception, though: if you are using a staffing agency. You want to be careful and make sure you hire a staffing agency that knows what they’re doing and has handled things like this before because this is a significant negative with the NC Board of Examiners of Electrical Contractors. They don’t like to see people hiring 1099 employees unless they go through the proper method of doing it, as I mentioned.
So, what we also need to consider is the reasoning behind this. They don’t specify in very clear, absolute terms in their code and statute that you can only hire W-2 employees and not 1099 employees. They don’t explicitly state this. Part of the reason for this is they don’t want to just say, “If you pay a person this way, that makes them a bona fide employee.” That particular part is found in the administrative code. There is also a different section in one of the statutes that discusses an exception to having a license. And that exception is if you are a bona fide employee of a licensee, then you have to determine what a bona fide employee is. A bona fide employee is someone under the control of a qualified individual, such as a business qualifier.
For example, if you own the business and are the qualifier for Acme Electric (if you’re a fan of Wile E. Coyote). The other scenario is when a qualified licensee is working for a company. So, for instance, if you are the owner of Acme Electric and one of the qualifiers, you may also have a W-2 employee who is also a qualifier for your company. Either you, as the owner and qualified licensee, or the other qualifier for the company, can go out and supervise the bona fide employee. That employee also must be a W-2 employee. Now, if that person is just a W-2 employee, does that necessarily make them a bona fide employee? No, it doesn’t. This is specifically stated in the administrative code. The code lists a few factors, such as whether the person is under your control and whether they follow your business policies and procedures, among other considerations. Are they using your equipment? These are the types of things that a bona fide employee would typically do. This is how you establish a bona fide employee. From my understanding, electricians refer to these employees as “helpers.” If you have a helper, they are using your tools, any other equipment, a voltmeter, or any other items you use in your normal course of business that are owned by your company. However, for them to be considered a bona fide employee, they also need supervision.  (See § 87-43.1(3) and 21 NCAC 18B .0306).
I hope this answers your questions, and I hope everyone has a fantastic day! Thank you for keeping the power on in North Carolina.

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