Do you sub out your work?
It is a very simple question but the most important. There is a definite market for subcontractors in the St. Louis area and people are building companies without employing one single person. What does this mean to homeowners?
Sales companies who sub out all of their work have a different set of rules when it comes to liability and control of the job-site.
The IRS and the Missouri Department of Revenue have a very clear set of guidelines when it comes to the difference between a subcontractor and an employee.
By definition of Missouri and Federal law a subcontractor must adhere to the following guidelines:
A sub supplies all of their own tools, equipment, and materials.
A sub makes their own hours and answers only to themselves.
A sub works for many different contractors and has a heavier workload than an employee. Often subs have many different jobs at one time.
A sub decides how much to charge instead of receiving a set amount of pay.
A sub supplies their own insurance. This includes workers compensation and liability.
A sub can easily slide people in and out of jobs without documentation and pay cash.
A sub can place a lien on your property if the general contractor does not pay them for the job they did, even if you already paid the general contractor.