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Client/Contractor issue. New Jersey

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  • Client/Contractor issue. New Jersey

    I'm with a contracting company (it's a security company, so it's basically people who're permanent and they're using it to avoid paying us the rates "real" employees get), but the client is dictating pay rates, when and to whom raises are given, what contract company's employees can do what positions, and so forth.

    There used to be one of us who had a legal term for the client trying to have such control over a contracted company's particulars, and I was wondering if anyone would happen to know what it is, so I may look into it further.

  • #2
    Are you an employee? (Meaning are you being paid via payroll.) Or are you an IC? (Meaning you're paid via accounts payable.) If an IC, exactly what do you do?

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    • #3
      Originally posted by eerelations View Post
      Are you an employee? (Meaning are you being paid via payroll.) Or are you an IC? (Meaning you're paid via accounts payable.) If an IC, exactly what do you do?
      We're employees of the contracting company, not independent contractors, so payroll.

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      • #4
        The term is "client". The client does get to dictate what rates they will pay for services randered to a large extent. This is typivally negotiated with the contract company. The client wants 6 security guards and wants to pay $12 an hour. If your employer wants that contract, they will agree to those terms. I've oversimplfying but there is nothing illegal in having the guards assigned to company X making $12 an hour and those at Company Y making $15.

        It is also not unusual for the details of the assignment to vary by location. At one site employees may get an hour for lunch and at another only a half hour. X might require inspections of the outside of the facility and Y might require sitting in an office all day and buzzing people in the door.
        I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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        • #5
          It's perfectly legal for the contracting company to pay its employees less than what its client company pays its employees.

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          • #6
            Originally posted by ElleMD View Post
            The term is "client". The client does get to dictate what rates they will pay for services randered to a large extent. This is typivally negotiated with the contract company. The client wants 6 security guards and wants to pay $12 an hour. If your employer wants that contract, they will agree to those terms. I've oversimplfying but there is nothing illegal in having the guards assigned to company X making $12 an hour and those at Company Y making $15.

            It is also not unusual for the details of the assignment to vary by location. At one site employees may get an hour for lunch and at another only a half hour. X might require inspections of the outside of the facility and Y might require sitting in an office all day and buzzing people in the door.
            The client is dictating specific employees' (of the contracted company) rates, and who (employees of the contracted company) gets raises and whatnot, though. My manager (the contracted company's account manager on site) has to say "Client, may I up John Smith's rate from $12/hr to $13?" We don't work FOR the client, he should not be dictating which XYZ Security rate John Smith gets per hour or when John Smith gets a raise from XYZ Security

            This isn't about the contract stating that "the employees of the contracted company will get $X/hr for the duration of the contract."
            Last edited by Consequences; 06-14-2012, 07:57 AM.

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            • #7
              The legal term is "co-employment". The problem is that while yes once in a very great while the employee goes to court and wins something, the vast majority of times the employer wins. The case everyone loves to cite is Microsoft, who had vast numbers of contract programmers on very long term assignments. These were all formally employed by third party companies, but Microsoft not only used extreme control over the activities of these workers, but these workers were also a very fundamental part of Microsoft's business. Not security guards but the people who did most of the heavy lifting with Microsoft's products.

              Your problem is that unless your client is another security company, you are never going to be able to convince a court, any court, that your services are a core part of the client's business. The cleint putting hard control over your services is enough to ensure that you are someone's employee, but legally not enough to make you THEIR employee.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

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              • #8
                Originally posted by DAW View Post
                The legal term is "co-employment". The problem is that while yes once in a very great while the employee goes to court and wins something, the vast majority of times the employer wins. The case everyone loves to cite is Microsoft, who had vast numbers of contract programmers on very long term assignments. These were all formally employed by third party companies, but Microsoft not only used extreme control over the activities of these workers, but these workers were also a very fundamental part of Microsoft's business. Not security guards but the people who did most of the heavy lifting with Microsoft's products.

                Your problem is that unless your client is another security company, you are never going to be able to convince a court, any court, that your services are a core part of the client's business. The cleint putting hard control over your services is enough to ensure that you are someone's employee, but legally not enough to make you THEIR employee.
                Thank you, that is the term I was looking for.

                Speaking of long term, the person who first brought this type of thing to my attention was here from 1987-2010.

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                • #9
                  Which is fine, but same answer. There are two quite separate issues.
                  - Is the worker someone's employee? That is where the control and longevity issues are most imporant. Since you are already someone's employee, the government just lost most of their interest in the situation.
                  - Is the employee a co-employee? This is a VERY narrow exception in the law, very rarely applied. For an employee of one firm to be a co-employee of some other firm their services must also represent an intregal part of the the business. An outside security company is pretty much a text book example of something that is not co-employment; unless of course the client is also a security company.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

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                  • #10
                    Thank you all for your responses, I got the answer I wanted.

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