Saturday, November 15, 2008

What is a Sub-Contractor

What is a Sub-Contractor?

Carpentry Sub-Contractors are dependant upon others for their livelihood, and they are often not in a strong position to set their own pricing. They get the “Going Rate” for whatever their specialty is. Often akin to slave labor, as prices tighten up, so does their pay.

Woodwork and other types of Companies have been trending towards sub-contractors and contract positions to avoid offering benefits and the need to take deductions and remit them to the government. It allows them to offload many expenses like pension, benefits, unemployment, compensation etc.

They force the sub-contractor to get a compensation and legal clearance certificate prior to starting the job.

It is a fuzzy line to pinpoint the difference, but one thing for certain--being your average woodwork sub-contractor is not an enviable position to be in presently.

Governments have created new definitions that generally state that a sub-contractor that only works for one contractor or client is an employee.

Lets say that you have had a sub-contractor working pretty steadily for 3 years, but you really didn’t sign any contracts for each job. The sub-contractor just invoiced hourly, rather than spelling out any jobs and amount to be billed ahead of time. The sub-contractor didn’t actually work for any other contractors whether you knew it or not.

That sub-contractor is actually an employee in the eyes of the government.

They will hand you a bill for all the deductions and compensation that should have been paid on that employee. doesn’t deal with sub-contractors and hasn’t for quite a few years.

We believe that a builder that has his name on the contract, his share of the profit and the pride of producing a work of art will always take more care and produce a better product than a sub-contract worker will.

Our builders on the whole get more referrals and produce more magazine quality work than any of our competitors do crew vs. crew.

We are presently gearing up for spring and do have areas available.

Click here for info about our Deck and Pergola Builders Group then get in touch with Lawrence Winterburn for more details at 888 293 8938.


Anonymous said...

I agree with you completely about where the line is for being a subcontractor or and employee. In my situation, the market here calls for our workers to be subcontractors because that is the normal agreement my competition offers. All of my subs work for other companies, have their own liability and workers comp, and pay their own taxes to the government.

Personally, I like this way better. I have had employees in the past, and having good quality subs is much better. My contract with them holds them accountable for the customer signing off on the project, and the quality of workmanship is better through using subs in my situation.

To each his own, is what I always say. But I would argue that there are pluses and minuses for both sides of this one.

Anyway, good article.

Unknown said...

Hey Keith-- good points.

Every state and province has different requirements and licensing statutes.

Sub-contract workers can be great when it is standard work--but once you start doing more complex work you will find that they just don't want to bother learning, adapting, asking questions or following our specifications generally.

I totally understand the use of sub-contractors in Raliegh. That is not an easy place to do business presently. I hope things get better for you there soon Keith.

I guess I should clarify that many of our builders utilize sub-contractors within their organizations and we don't dictate non use that way. (the company), chooses to work through our own licensed builders. If they choose to work with sub-contractors and supervise them, so long as they back the work with a 5 year warranty and build true to our specifications... there is no issue.

Hey Keith--when are you going to build some of our stuff?