Inspection Trends /Spring 2013 25 expenses, you owe quite a bit of money that you didn’t plan for. Then you find out you are responsible for the employer’s portion of Social Security, your own unemployment taxes, and several others because you are now “self-employed.” Speaking of being self-employed, you could even receive a letter from the IRS stating it doesn’t consider you self-employed because for the past two years all your checks have come from only one company. According to the IRS, you are an employee. Are you prepared for the payment of taxes and all the appropriate paperwork that is required for being self-employed? Do you plan on working for more than one customer? You need to either learn the tax rules and consequences yourself or find a good accountant who can give you expert advice. Scenario 3. You get to the job and they tell you to use the manlift and go on up and look at the welds. As you are moving the manlift, you get off the edge of the concrete and tip it over. Having dealt with the question of insurance previously, you know you have insurance and so you feel relieved. That is, until they ask for your qualification card as a manlift operator. Not to mention that the job specs state that the “special inspector will not operate the contractor’s equipment but will be assigned an operator” to take him around. Now, your insurance won’t cover you because you were using someone else’s rented lift and you weren’t qualified in its operation. Have you successfully completed the 30-h OSHA training course on Construction Safety and Health (usually referred to as OSHA 30) and are qualified/certified for manlift, fall protection, and other applicable safety programs? Did you read the job site responsibilities for subcontractors? You need to know your legal limitations and responsibilities on the job site. You may be the best lift operator in the state, but if you didn’t rent it and don’t have the proper qualifications then you better not operate it. More and more jobs are stipulating OSHA 30 and other safety qualifications in order to be granted access to the work site. And no matter how much information the inspection agency that hired you sent the general contractor/customer, if you are a subcontractor and don’t have all your own qualifications, you are in a difficult position if something goes wrong. Scenario 4. The situations I presented previously dealt with being on the job site, but there are considerations that need to be examined at the very beginning of your business venture. Do you incorporate, become a limited liability company (LLC), or simply work as a DBA (doing business as), meaning that you’ve set up a fictitious name? There are many issues to consider regarding this decision. It will really depend upon laws and applications of those laws between your state, corporation commission, and registrar of contractors, as well as how you want to establish your business with regard to taxes, payroll, insurance, customer/contractor requirements, and many other options. For my own business, I decided to become an S corporation. If you are not familiar with the term S corporation or S corp., it is, according to the U.S. Small Business Administration, “A special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. An S corp. is a corporation with the Subchapter S designation from the IRS. To be considered an S corp., you must first charter a business as a corporation in the state where it is headquartered.” I have a fabrication shop as well as the inspections business, and being an S corp. works for me. My company has all the needed papers, licenses (city business, registrar of contractors); insurances (general liability, professional services, workers’ compensation, worksite auto, etc.); bonding; employer identification number (EIN); and so much more that is needed when contracting for work. In addition, I, personally, have all the other qualifications that will be requested to work at the customer’s site. An S corp. will possibly be the most expensive type of business to set up, but will give your personal assets the best protection in the event of an accident or any other situation that causes financial repercussions. How to set up your business is another one of those decisions that anyone planning to be self-employed needs to consider. Scenario 5. To do your work properly, you need a safety harness, inspection tools, safety shoes, safety glasses, hard hat, safety vest, ear plugs, volt/amp meter, temperature-indicating sticks or gun, computer, phone, etc. Whose tools are you using in the performance of your job to inspect the welds? Especially if you are using these items from the agency you are subcontracted to, you may have again placed yourself in the position of being recognized by the IRS as an employee and not as self-employed. You need to learn what equipment you must supply for yourself and consider those costs if you wish to be self-employed. Scenario 6. After having paid for several reference books and at least one code book from AWS, you get on the job and start working, inspecting welds. The customer wants you to verify the material being used and you discover you need a copy of the ASTM standards to accomplish this. Then a question comes up and you discover the answer will be found in the AISC Construction Manual. Someone challenges whether an item is within the scope of your job and you now need a copy of the International Building Codes. The code book you got for your CWI exam just got replaced by a new edition plus you need the seismic supplement. Who is providing for your constant need to add to and/or replace code books and other reference materials? If you are truly working for yourself, you need to have a fund set aside to buy these code books and standards, key components of your profession. Summary Many general contractors are becoming painfully aware of the failure of many subcontractors to have the proper documentation to show they have fulfilled all the requirements necessary to be on their job site without compromising the general contractor’s and/or customer’s liability. They are getting very explicit about who is qualified to be on their job site in any capacity. Inspectors are not
Inspection Trends | April 2013
To see the actual publication please follow the link above