Vicarious Liability Threatens Contractors on Multiple Levels

Mark Hady of Hady Electric Inc in Watertown, Wis, has not faced the problem of vicarious liability yet, and he hopes not to. “The hiring practices of my subcontractors is just not an issue I had given much thought to,” he said.

“Vicarious liability” typically is applied to businesses for the actions of its employees, such as when a security guard injures an unruly bar patron and the establishment is held responsible for the patron’s injuries. The bouncer acted in his professional capacity on behalf of the company when the injury occurred, but the establishment is vicariously liable for his actions.

However, electrical contractors could face similar issues under completely different circumstances if legislation such as the recently sidetracked Senate immigration bill is passed. In this case, the liability would stem from the hiring practices of a contractor’s subcontractors or materials suppliers.

According to Bob White, executive director for Government Affairs for the National Electrical Contractors Association (NECA), vicarious liability for hiring practices in electrical contracting would be “a way of holding contractors responsible for the hiring practices of others over whom they have no control or investigative power.”

If even one of an electrical contractor’s subcontractors, distributors or materials suppliers knowingly or through lack of due diligence hires an illegal worker, the electrical contractor would be personally liable for those hiring practices—potentially facing stiff penalties, fines and jail time, even though the contractor has no authority to control or even investigate such matters.

“Immigration law … belongs in the hands of the government agencies charged with enforcing the law,” White said.

There is a solution, and it is one that NECA and other industry associations have been working on to address the issue.

Rep. Carolyn Maloney’s (D-N.Y.) much-anticipated federal construction contracting reform legislative package could set hiring practice qualifications as one of the preconditions to contractor and subcontractor eligibility for contract award. Enforcement would fall to the contracting agency or be placed with another government entity, such as the Department of Homeland Security, White said.

However, until an alternative solution is found, contractors such as Hady will be living under the threat of federal legislation that could turn them into immigration police and place their businesses at constant risk.

“That’s not something I want to gamble with,” he said.     EC







About the Author

Jeff Kohmstedt

Freelance Writer
Jeff Kohmstedt is a freelance writer in Champaign, Ill. He can be reached at .

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