For contractors working in the New York area, hiring subcontractors is an ideal way to bring in professional helpers with a particular expertise, and keep up with a heavy workload. There may be some added concerns when hiring subcontractors that you need to be aware of, and construction insurance is extremely important to help mitigate these added risks. The following tips were created to help you create good working relationships with your subcontractors.
- Knowing your legal liabilities
There are some legal risks in hiring a subcontractor. With stricter federal tax and labor laws in place and widespread misunderstanding about who is legally considered a subcontractor, you need to know the law. If you are completely in charge of what work is performed, and the how’s and where’s and whys, that’s not considered a contractor relationship. Violating labor laws can cost you back wages, which also means you will likely end up paying back employment taxes and penalties as well.
- Take the hiring process seriously
You can learn a lot about a person’s work ethic and values by asking pertinent questions like, for example, what’s important to them? What were some of their prior experiences? When having this conversation pay close attention to their answers. You also need to be diligent about checking references. Whenever possible, visit the subcontractor’s current job site or otherwise take a look at their work to make sure that it is up to your standards.
- Get everything in writing
A detailed written agreement is a must for any subcontractor you hire. It should clearly outline the specific scope of the work, a set price, and date of delivery, if applicable. It’s also a good idea to include standard terms and conditions to make sure you have at least basic protection, including:
- Payment terms (e.g., net 30 days)
- Any applicable warranties
- Any indemnification agreements, and
- Insurance requirements
There are other items you could include, so ask an attorney or agent about your situation to make sure you’re covered and keep sufficient construction insurance in New York for those times when things go badly.