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The Real Estate Addicts (REA) podcast is a must-listen for anyone interested in real estate development, investment, construction and entrepreneurship. Each episode dives into a wide range of industry topics and features conversations with savvy, successful entrepreneurs who candidly share their career paths, challenges, breakthroughs, and the stories behind the remarkable companies they’ve built. Expect big personalities, thoughtful insights, and conversations that both educate and inspire.
Co-hosted by Ray Hurteau, Dan Rubin (Instagram: @rhinvestgroup), and Marc Savatsky (Instagram: @choose_boston)
Follow the Real Estate Addicts Podcast on YouTube: @RealEstateAddicts
00:10
Coming at you hot here with some Catholicism. Oh, Jesus. Just kidding. What are we talking about today? We're not talking What were you talking on Oh, yeah. Mark, I think we were talking about labor. Yeah. Recently got something of a crash course in uh labor law. Because of anything that happened? Just shenanigans. I'll leave it broad for now. But... It's very broad. Yeah.
00:40
shenanigans being just like a dumb waste of time and resources, know, ambulance chasing kind of thing. No, no. I mean, if you can believe this, we, this is, this would be an offensive measure. Uh, so, just to, just to rebut the most ridiculous claims as it relates to like non-compete non or really non solicitation. Um, so learned, learned a lot. Uh, first of all, any good nuggets. Yeah.
01:09
Happy to share a bunch. um One non-competes and non-solicitations in Massachusetts have to be reasonable. And it's a blue pencil state. So like a judge can read through it and say like, nah, that timeline is ridiculous. You know, write it out and write in whatever he thinks is reasonable. is it Massachusetts and at will state anyway? So if one party wants to end it, that's it, it's over. It's not like there's some implied ongoing relationship or is that not true? It's less about that. mean, no. Okay. Yeah. Non-solicitation, non-competes. So you're working for a company.
01:39
and then you decide to switch to another company, similar industry. You can't do certain things. Well, no, think the not, you have to, if it's non-compete, that has to be signed at the time of employment as part of some sort of documentation. Sure. Yeah. The hiring docs, sure. It's not just like, it's not like a blanket automatic law. Right, like if I'm at Apple, I have every right to just say, I'm leaving Apple, I'm gonna go work at Google. Yeah. Yeah.
02:08
All right, so putting aside that part. you're not, sorry, but you're not allowed to bring any intellectual property from Apple to Google. That's- Yes, and that would be, I mean, aside from what you know in your head, you're not allowed to copy paste like files and- Correct. Procedures and all that stuff. Correct. Yes. Okay. Do we bungle this on you, Mark? No, no, I kind of started the bundling. We're trying to save you. my, where it's going is, you know, labor misclassification. Got it.
02:36
uh, my labor attorney told me, cause we're going back and forth. And I was like, well, put this in perspective for me. And she said that she just had a class action lawsuit from a number of pest control technicians at a company who got together against their employer and they were awarded a judgment well north of a million dollars for these employees being classified as independent contractors instead of employees. um
03:02
And so it begs the question, I'm like, what do we do? oh don't What is considered, where's the line? Yeah. So I should preface, like, speak to your labor attorney. I'm not a lawyer. You know, I just pretend to be one on a podcast a little bit, but there's a three-part test in Massachusetts. Allegedly. determines if you're an employee or not. And it starts with filing a complaint with the attorney general's office. So the AG is going to listen to the complaint and they're going to decide.
03:31
That's one we want to take on ourselves. you know, they're bad dudes. That's, that's truly abuse of uh employees. ah And we're here for the people and you don't worry about paying an attorney. We got this and what we win, we'll, we'll kick it back to you. That's an option A. Option B is you get a letter back that says like, we've reviewed this. We unfortunately don't have time. It seems whatever. ah We give you the private option to go and pursue damages ah by yourself.
04:00
hire your labor lawyer, Michelle, have at it. So that's what happens first. So A is like the Amazons and Ubers of the world. like, are good and be good cases, newsworthy cases. The other ones are like, it's mom and pop place. Probably, maybe you have a connection at the AG's office. Yeah. Not going to draw any headlines, basically, and then score political points. Go for it. I'll say And the third. Third one.
04:30
The big, one of the most interesting things to me in this process is that if the independent contractor is doing the nuts and bolts, the daily work of your business, they're not an independent contractor. it's no pun intended nuts and bolts of a construction. But like, so like if you run a construction company and you hire an independent contractor who does uh marketing and graphic design, fair game. If you run a trash business and the guy doing your work.
05:00
is on the trash truck picking up the trash, not an independent contractor. But one could say any sub you hire, any sub you hire is an integral part of your... It's the main, the meat and potatoes. It's the primary function. I see. What's the primary function? What they're performing. Because building a house doesn't have really a primary function or renovation. If you're the plumber and you hire a bunch of plumbers as independent contractors, then they should be employees.
05:29
If you're the GC and your guy is coordinating the plumber, the electrician, the framer, well, that's the primary work of a general contractor. The GC, yes. Look, I'm sure there's... can see that argument. I'm saying plumbing doesn't make a house. So how is that the integral part of the job? Well, it would be if the plumber hired somebody who he was paying as an independent contractor rather than Mark's saying that the plumber's employees, I guess, are the people that are working for the plumber.
05:58
If they're integral to his business, which is plumbing, then they are employees. are not. But most, most subcontractors are all, they're all their employees are independent contractors, right? Yeah. I mean, yes. And this, this may be as one of the, I know if yes or no, but this may be one of those where it's like, yes, what the, do you want me tell you what the law says? ah They shouldn't be. And I think that's a big problem with the union. Like the unions.
06:27
have a very strong case about a lot of these open shop subcontracting businesses that don't do it the right way and don't pay benefits and Don't give them paid sick leave and call everybody an independent contractor when they're not so like look you get in the politics if you want but the law I think is very plain and the other thing that's interesting is uh So like if you're using all of your time for that company and they control your time You're also not an independent contractor
06:53
Yeah, if they tell you when and where to show up. That I know. You must use this email address. You must wear, you know, blue and the Union logo on your shirt at all times. ah Or they tell you then what about real estate agents? Because real estate agents are all independent contractors, but like some of the big shops like Compass and Coldwell Banker, it's like, you have to use our marketing, you have to use our platform, you have to use our signage, you have to, so it's like...
07:22
But isn't this why they're like independently owned quote unquote? No, no, no. mean, I don't know the answer to that. It's a good question, but I don't think that being independently owned absolves you of these requirements. You're still, if that was to be true, it's still franchise model. it's not, I, know, my, my realtors all signed independent contractor agreements and, sorry, you were talking about the plumber and.
07:49
the workers of the I'm saying on a development project, you hire a framing company for six weeks. What are they W2 for six weeks? That makes no sense. should probably, you should probably use, if you really want to comply, you should probably use a temp agency. Or give them short Is there a temp agency for construction? Yeah. Very much. There's many of them. So it's challenging. does that actually work? Yeah. I get like an email a week from this one guy who's got, gives you the
08:18
wages for carpenters, laborers, plumbers, journeymen, labor ready. But like you have relationships with subs. It's like, you're not going to go to temp agency every time you want to go and work. own a subcontracting business now. We do demolition and trash hauling. So like I do need labor. And so we are thinking about those types of things. Like who's going to ride in the truck? No, right. I'm talking about on the GC side. Like I'm not as a GC, I'm not going to a temp agency to like hire a sub. Oh no, no, no, no. It's kind of on the sub.
08:48
though. It's always weird. The GC role is always weird. It's sort of like if someone gets hurt on your job and they have a very gray area, like floating you like, are you their employer? And I think there's case law that's pretty varied on this, but I'll leave it there because that's that's gonna start getting really complicated. um But the other thing is damages, which is interesting. So the damages add up quickly because it's like double and attorney's fees.
09:14
Um, for your economic losses and how they're calculated and, essentially, like, if you want to try to do a profit sharing model, they still, you still have to pay minimum wage and you have to pay within six days of the pay period. If you do not pay your employees within six days of the pay period, like that will go into that category. if they're paid bi-weekly and you don't pay them.
09:37
You're not even, I don't think you're even allowed. six day buffer to pay them. If they're hourly, I don't think you're allowed to pay any less frequent than every other week, right? You can't pay monthly salary. could do monthly, but. Yeah. I'm not about like overtime comes into play and, you know, all this stuff. like, it's very, it's interesting how quickly those numbers can start to add up. Right. So, you know, you think you just have a rodent control technician. He's not going to get a lawyer. I'm not too worried. Now all the sudden. dollars later. Yeah.
10:07
Maybe you should have paid benefits and called them an employee. So yeah. But think about how that, don't know, because I feel that the majority of small business owners on the sub-contracting side don't have full-time employees, nor could they afford to have full-time employees, right? And what does that do to the overall labor market if now you're
10:36
all of your subs have to have full-time employees and you have to give them health insurance and you have to give them like retirement benefits and all this stuff. How does that affect? technically you could offer those benefits, but don't the small businesses end up getting like really shitty plans so like your premiums will be crazy and you might just say like, well, my wife's got a job at No, Massachusetts, if you have a certain number of employees, I think it's, I want to say it's seven.
11:04
or more. Yeah, you're right. Is it seven? uh Paid sick leave. Family. And you have to give them health insurance. have to provide health insurance. Right, but what plans would you even qualify for is what I'm saying. You'd end up with a really shitty plan, no? Or do they force you to pay a certain percent of premiums? It's insanely expensive, because when my dad owned his business, he had to pay for health insurance for his employees, and it was so expensive. Yeah, more than four employees, you need to have like,
11:33
policies and employee handbook and guidelines around things like sexual harassment six employees more than six employees, I believe it was a Paid sick leave. Yeah less than six. You still have to have sick leave. You just don't need to pay for it as I understand Yeah, it gets very very expensive. It's already expensive owning a business but it gets way more expensive when you have full-time employees and I think that it seems that
12:03
It's a gray area and people know this, but a lot of it's not enforced because they know that if they started enforcing it, the labor pricing would skyrocket and it would make everything so much more expensive. Like your landscaper, like how expensive is the guy that's gonna clean, like mow your lawn now? Well, you're making a case for the unions. I think if we had the head of the New England Regional Council of Carpenters sitting here.
12:32
They say like, precisely right, and you should be, and all of those guys should be. And that's why there's two different pricing schemes out there. And it's not fair that there is because this one group is following the law and that group isn't. you know, it's probably what the law says. It's probably what the law says. I agree. And my counter argument to that is it's like, oh but like how, like you have a certain number of projects going on and yes, the big guys are forced to use union labor.
13:00
but 99 % of the smaller projects with pencil and wouldn't get built if you had to use union labor. So then what was his, does he just not care? It almost seems to be as if there should be like a sizing requirement layered into that. I don't know. Maybe we should have a labor attorney on at some point who is an expert in all of these things, but.
13:22
I'm not sure you'd like what they have to say. No, I'm sure a lot of times if you have an attorney on here, you probably won't like what they have to say with regards to a lot of things that have in business. And probably like business, everything is fine until it's not. Like someone, God forbid, gets hurt and all of sudden now they're talking to somebody who's very informed or if somebody starts some sort of a thing and then you're...
13:47
You know, you don't have all your COIs lined up. You don't have all your ducks in a row, things signed. And we can continue this on a future episode, I just thought some of those high level things were very interesting for the test of whether you're an employee or an independent contractor, how easy it is to misclassify those, you know, this concept of wage theft on the employee. Um, have to be super careful. It is just, it is not a difficult thing to pursue.
14:15
as an employee or employees getting together, um there's really a pretty high burden. No, it's, I think when you get into all this legal stuff, it's just, it can be very overwhelming because there's so many details that you have and laws that you have to follow. there's like, unless you hire an attorney to review all your shit, there's no way you're going to be able to do it all. And there's different standards. There's one where if you're 40 years old or older,
14:45
which made me feel really old because I fell into this protected category. As she was saying it, I was like, God damn. But that's like triple damages. ah you know, attorney's fees is always included in these types of labor things. And um so it seems like if I was going into law, I might want to be a labor attorney. It's a good space to litigate. God damn. mean, if you, if you, but I'd say to, guess to your, answer your question, Dan, maybe partially.
15:14
You don't want to be known as the litigious uh individual in the relationship. So it's like, kind of like a one and done. No one's going to hire you at that point or consider you not saying that that's fair or whatnot, but that would get out. No. if you sue your employer. Yeah. If you're, all of a sudden you're just an abrasive person and you're always looking for a fight, like people will figure that out and then you'll just be unemployed. Yeah. I guess a lot of times when I, when you're applying for jobs, like
15:43
There's a question on the application that says if you're currently or you've been ever been involved in a lawsuit. Yeah. You know, even if you're applying for a loan. Yeah. I saw one guy who was literally just going on interviews and then when he wasn't getting hired, just suing for discrimination and just constantly winning. I think he made a TikTok account. It's one of my many TikTok videos. That's the fun nugget for the day. So I don't know. Do you want that over your head versus somebody that's totally malicious? I don't know. You just never know. Like I think that's to Mark's point. Yeah. It's just.
16:13
You can't control it. do your diligence, hire an attorney. Don't listen to us. Uh, completely. I'll fill in blanks at some point. Yes. We get the details on the backstory. Yeah. It's not going to be my decision. That's all right. Maybe when it's all over and you could talk about it. I love it. All right guys. here for it. Thank you guys for listening and rating. Honestly, if you could please leave a review on Apple podcasts, it would mean a ton to us. Um, also a bunch there.
16:40
I know, but we- Let's get more. How many do we think should more so subscribe to our new YouTube channel. Can you leave comments on podcasts, on Apple Podcasts? On YouTube. people interact? No, I don't think they can on Apple Spotify they can. The reviews you can add a comment, but thank you guys for listening. We'll see you on the next one. Cheers. All right, bye.