Below is an excerpt from an article written by Jeffery King in the WFCA web newsletter. Mr. King is a partner in the Washington, D.C. office of Crowell & Moring LLP, he serves as general counsel for WFCA and other trade associations.

Government Crackdown on Independent Contractor Classification

Late last month, the Secretary of Labor signed memoranda of understanding with the Internal Revenue Service (“IRS”) and officials in eleven states (Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah, and Washington) to coordinate efforts to crack down on independent contractor misclassification. The Department of Labor (“DOL”) action indicates a new and more aggressive enforcement effort by the federal government and state agencies and coincides with the state and federal governments efforts to identify opportunities to enhance their revenues. At the same time as the DOL made its announcement, the IRS revealed its new “Voluntary Classification Settlement Program” to encourage employers who have misclassified workers in the past to “get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.” Under this Program, employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they start treating misclassified workers as employees.” How does that affect you as an installer or a store owner? I can’t say for sure, as I am not a lawyer, but is you are a retailer or installer, it’s probably a good time to talk to your lawyer or tax professional to find out.

ANSI Standards

What are ANSI Standards and why are they important? A brief explanation below taken from Wikipedia explains what they are better than I can. The reason they are important is they very well may affect your job and the amount you get paid. These standards will replace the Carpet & Rug Institute manuals 104 & 105. Up to now these were the closest thing we had to industry rules. ANSI Standards will replace them and I have been told that major mills intend to tie their warrantees to their carpets being installed according to ANSI Standards by ANSI Qualified Installers. Just as they have tied warrantees to proper cleaning by IICRC Certified Cleaning Technicians. Now while the explanation below states the ANSI Standards are voluntary consensus standards. If the mills adopt them as their “Manufacturer’s Installation Specifications” and tie their warranties to installation following those standards, we will finally have one coherent set of rules for proper installation.

I know your next question is, “Who the heck is writing these standards?” There is a consensus board made up of a wide representation of industry members, which includes but not limited to: major carpet mills, manufactures of; adhesives, cushion, tools, installation supplies, and representatives of the installation and cleaning community, Union, CFI, and independent installers. I even managed to flim-flam my way on to a couple of committees. The process is not complete, but getting quite close. The whole thing will be offered for public review before going into effect. I am not sure how it will be available, but I assure you FCI magazine and I will keep you informed. How’s that for a teaser to keep you reading?

“The American National Standards Institute (ANSI) is a private non-profit organization that oversees the development of voluntary consensus standards for products, services, processes, systems, and personnel in the United States. The organization also coordinates U.S. standards with international standards so that American products can be used worldwide. For example, standards ensure that people who own cameras can find the film they need for that camera anywhere around the globe.

ANSI accredits standards that are developed by representatives of standards developing organizations, government agencies, consumer groups, companies, and others. These standards ensure that the characteristics and performance of products are consistent, that people use the same definitions and terms, and that products are tested the same way. ANSI also accredits organizations that carry out product or personnel certification in accordance with requirements defined in international standards.

Though ANSI itself does not develop standards, the Institute oversees the development and use of standards by accrediting the procedures of standards developing organizations. ANSI accreditation signifies that the procedures used by standards developing organizations meet the Institute’s requirements for openness, balance, consensus, and due process.

The American National Standards process involves:

• Consensus by a group that is open to representatives from all interested parties

• Broad-based public review and comment on draft standards

• Consideration of and response to comments

• Incorporation of submitted changes that meet the same consensus requirements into a draft standard

• Availability of an appeal by any participant alleging that these principles were not respected during the standards-development process.

I see big changes coming for our industry, not that change is bad, mind you. It’s like mom always said, “Change is good.” Of course she was talking to me and my brother about socks and underwear at the time, but the principle applies to what’s going on with carpet installation as well. Is this the start of a brand new day for our industry? Let’s hope so.