This morning, I observed a situation very close to home that caused my voice to rise in anger. Should someone I know well (an 18-year-old) sign a legal waiver document before going to work on a residential renovation site? Questions swirled: What is he doing that would require this sort of waiver? Should he not be regarded as an employee rather than an independent contractor? And then, the kicker: “We’re wiring a home” — wait, isn’t that the work that should only be completed by a certified electrician?
The individual here is young adult and legally can make his own decisions. I told him, however, that he should not sign any legal waivers here. There are narrow exemptions from workers compensation insurance requirements in Ontario for independent contractors working on residential renovation projects (directly contracted by the live-in homeowner, and not covering fix-ups for landlords). But I can’t see how he could be regarded, given the nature of his work, as an independent contractor rather than an employee. And he certainly doesn’t have an electrician’s ticket.
The business for which he was to work is a legally registered organization. It doesn’t take too much extrapolation to see what is happening. The contractor bids low on jobs, based on avoiding certain regulatory costs. He doesn’t need to market publicly; word-of-mouth and low prices (to the end-user) make it easy for homeowners to say “yes,” especially since the transaction from the purchasers’ end may seem above-board.
In this context you can see clearly the challenges that affect the industry and its marketing culture/values. Contractors who play by the rules need to charge more, and then explain both the nature of the rules and their possible importance. Selling becomes less a matter of the contractor’s virtue/value, than overcoming the competitor who takes shortcuts. It isn’t an easy game.
In this environment, contractors have two choices. They can stoop to the lowest common denominator and join the borderline contractors playing with the edges of employee misclassification, failure to observe certification regulations, and avoid paying workers’ compensation insurance premiums. Or they can develop an assertive and effective marketing and sales system that attracts high quality leads and converts them into customers willing to pay for the services compliant with the law, and at a price that is high enough to allow the contractor a fair profit.
Anyone who says this is easy has blinders on their eyes. Heck, you’ve got to pay for consulting/marketing advice, attract the right clients, sell them on the “higher pice is really good” message, and then deliver the job at a profit. No wonder this industry has so many problems.