In today’s broadcast we want to focus on the subject matter of Job Work.
Social Security has been encountering situations where employers are claiming that some of their workers are doing JOB WORK. In fact in some cases, even the workers themselves are claiming that they are doing Job Work. Much of this is turning up in the construction sector but other sectors are also involved.
The effect of such a claim is that the employers are not held to be responsible to pay Social Security for such workers. However when Social Security examines the cases, it turns out (in many of them) that what they have been describing as JOB WORK is really not the kind of arrangement that fits that description. In fact it is soon realized that some such employers are basically seeking to avoid their obligations to Social Security. Others are simply trying to pursue an arrangement that they feel will get the most production out of the employee.
At the end of the day, whether it be Job Work or an employer-employee relationship, Social Security will still come into play since coverage is mandatory even for persons who are self-employed; in which case the self-employed person would be under a legal obligation to pay his/her own contributions
Whatever the circumstances, Social Security will conduct an assessment of the true nature of the arrangement to determine if JOB WORK is really the situation in each different case. Sometimes it may be and sometimes it simply may not be the case. If the facts point to an employer-employee relationship, then the employer is responsible. If the facts point to a contract for service, then the self-employed person is responsible. It is always important to determine who has liability in order that the law can be applied equitably if it comes down to taking legal action to ensure compliance.
The question of whether it is ‘job-work’ or not, is something that may be assessed by taking into account a number of basic criteria. Here are just some of them.
- How much control being exercised by the one person over the other in the performance of the task(s) involved?
- How often is the same individual engaged to work for the same employer, or how long has such an arrangement been in place, ot how long is it expected to continue?
- Whose equipment and other tools and implements are being utilized to do the work?
- What stipulations are in place regarding time of execution of the tasks?
- What stipulations are in place regarding time of reporting to work and time of leaving?
- Is the worker entitled to engage in work for any other ‘employer’ at the same time?
- Is the worker entitled to engage employees of his own in the execution of the task(s)?
- Does the worker offer similar services ‘to the world at large’?
- Is the worker a bona fide service provider in the field of activity, registered with the appropriate authorities and paying relevant fees, taxes, etc.?
These are just some considerations that may be looked at in determining whether or not someone is an independent contractor or sub-contractor (doing JOB WORK) or just another worker for whom an employer is responsible.
Just a few more observations on this matter:
Many of the persons who are engaging in the work under the presumed status of JOB WORK are not taking into account the fact that (in such a capacity) they would not be covered for employment injury. So if something happens, who is responsible?
As indicated before, some contractors may feel the need to resort to this JOB WORK scenario as a means of providing greater incentive to workers to complete given tasks in a timely and cost efficient manner. In other words, they are thinking that when persons are given regular hourly or daily paid work or weekly wages, they do not produce as much as they could. However when they are given JOB WORK, they are able to get more work out of the workers. Some employers admit (however) that better management of their workers can achieve the desired result of maximum production from workers.
If you are in doubt about your particular situation, please contact your nearest Social Security Office without delay.