Illegal Employment in Commercial Cleaning
Why Janitorial Service Customers Should Pay Attention
Rampant in the janitorial service industry is the practice of commercial cleaning companies using “independent contractors” rather than claiming these people as employees on the payroll. Technically, janitorial workers cannot ever claim independent contractor status because the IRS requires that independent contractors can set their own hours, provide their own cleaning supplies, be able to make a profit and not receive pay on an hourly basis, and not receive training or instruction from the employing company.
Janitorial service companies utilizing illegal subcontracting schemes are able to bid lower than legitimate competitor cleaning companies. These illegal schemes result in labor costs estimated to be 20% to 30% lower than those of commercial cleaning companies following the rules by hiring employees on payroll, and labor is the primary cost of janitorial service. These illegal subcontracting schemes employ people willing to accept less than minimum wage in exchange for cash payment of services.
Cleaning service customers often do not check on the legitimacy of the employment relationships of their contracted janitorial companies because they wish to keep cleaning costs low. But what are the downsides to this less than squeaky clean practice for clients?
Although your janitorial service may be licensed and bonded, it’s likely that services provided by independent contractors are not covered under these policies.
Lost tax revenue on employer taxes and employee wages impact the community in which your business operates and may indirectly result in higher taxes for your business and personal income.
You risk your company’s involvement in a lawsuit claiming employment of illegal immigrants or minimum wage lawsuits. While this may seem unlikely because enforcement is weak, responding to threats of lawsuits takes time and financial resources away from your business and harms your company's reputation.
Illegal employment practices are wrong. Most business owners consider themselves ethical people; take the time to check on the employment practices of your own contractors to make sure that your business can feel good about the businesses with which you are connected.
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