Labor Commission Pre-Hearing Conference

dmkhnr

Here's the scenario:
I'm a General Contractor
I hired a contractor (unlicensed) to frame a home for me.
Everything was good up until the end, as there was some shoddy work, and incomplete tasks. The contractor was paid all along the frame per our draw schedule, and upon submitting a final draw request, I told him to fix/finish the items before the final payment was to be made. The contractor got upset, and pulled his crew off the job stating that I was screwing him out of money.
That evening, one of his employees came to me demanding money. I explained to him that he wasn't working for me, and he needed to speak to his boss. In reply he said that his boss wasn't paid for work done on my job, and in return cannot pay me, he also said he was going to file a claim at the labor commission. I offered to get the phone number for him, and ended the conversation.
Another one of the contractors employees has also filed a claim against me, no contact, but stating he wasn't paid, because his boss wasn't paid by me.

I never had any control over these people, in fact I only knew their first names, no paperwork, no checks ever written. They claim to have worked on my jobsite for 5 days, of which I wouldn't be able to say if they were there or not.
I rented a piece of equipment for the sub-contractor, and told him to return it when he was done. He had one of these guys bring it back to the rental yard, and sign the return sheet, of which this employee is trying to use as proof that he worked for me.

I gave the sub-contractor several opportunities to go fix the problems, but was told that I couldn't be trusted, and he was going to walk away, although his employees would be persuing me.
Do these employees have grounds to come after me like this???
Any advice?
It's going before a pre-hearing conference.
thanks

ProWallGuy

I have no idea if the employees can legally come after you.
But the questions begs to be asked:

Why the hell did you hire an unlicensed contractor?

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Digital Murals Installation

joasis

I don't think the license has as much to do with it as everyone else will jump in here. How about a CONTRACT? In Oklahoma, we do not have licensed contractors (except mechanicals) but we do have CONTRACTS that will control those things.

I would bet the guys who worked for the hack will file a lien next...your only option is to lawyer up, and I would not be surprised if you don't end up paying them. Your saving grace is the contractor's employees cannot show any proof of direct payment from you to them, but you should have a payment record between you and the contractor, which in Oklahoma, I believe is called an "implied" contract, and is enforcable. But you still have to Lawyer up.

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AtlanticWBConst

As Joasis says Lawyer up.

It obviously sounds like that 'contractor' who you hired is a dirtbag kept the money and didn't pay his help. Then he lied to them and put the blame on you. DIRTBAG.

Get information on him. Get all you can and bring it to the right kind of lawyer. Chances are that he has done this before.
This type of scum is'nt that smart.

There are great lawyers who deal with these kinds of dirtbags ALL the TIME.

We have a lawyer on one dirtbag who did something similar to us. They are taking care of everything....

Best of Luck.

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- Build Well -

dmkhnr

I will not hire another unlicensed contractor, as I have used several in the past for foundation/flatwork and framing. They are more hassle than the money saved.
The pre-hearing is just the sub-contractors employees, a labor investigator, and myself. They have the burden of proof. One employee has a tool rental statement, the other has a witness. I have no contract, but a draw schedule that their boss gave to me drawing up to $12k, and checks that were written to their boss for the amounts totaling $16k.
Their boss is not involved in this, unless his employees are using him as their witness. I know these employees still work for the sub-con, and found out through the grapevine that one of the employees is involved in a wife swap circle that includes his boss/wife.
They aren't alleging alot of money, $1300 total, but after all the labor commission penalties it ends up being over $7k.
There are no time cards, no bills, I didn't even know their last names until the commission sent me letters.
I live in a gated community, and it turns out one of the employees mother lives down the street from me. I woke up last Sunday to my dog barking at 5:30 A.M., but didn't find anything unusual. Later that morning I find my back window to my truck bed shell broken. Evidence of a 1" diameter round object in the tempered glass. I live on a golf course, but am out of range of any golf balls, and found no evidence of any golf ball. Seems to be a hammer that did it. I filed a police report, and gave out their names. Went to Costco, and bought the camera surveylance system that they sell with night vision cameras, got a new back window put in, and the truck is parked under a camera.
DK

realpurty2

At this point reminding you of the bad decision to use unlicensed labor without a contract is useless. Remember it and don't repeat the same mistakes. The important issue now is to resolve the current dispute.

Like everyone above says.. Lawyer up, or at a bare minimum, start the process of getting it into mediation between you and their boss. The subcontractor's employee's did not work for you directly, but as the GC, your indirectly responsible and accountable for everyone on that jobsite. It all depends on how tough they want to be on you. Sadly, this could land in your lap like a ton of bricks because you were the one who allowed the unlicensed boss to perform labor on your behalf. Unless you can prove fraud that he misrepresented his business as being legally licensed to hire subs and perform the work you hired him to do, it could come back on you, or worse yet, the employees could lien the house and involve the HO's. You may get be able to show your receipt of payment to the sub and it become his neck in the noose, but not unless the commission rep. feels confident that the actual sub-employees will get paid when all is settled.

Do NOT mention that during the meeting. It is of no revelance to the situation and will harm you drastically if you do not maintain complete business professionalism with the commission rep. Go in well prepared, with as much documentation as you can. Your salvation rests on showing that rep. that you did business by the book and the sub is the only one who has broken practice.

Laws are different in every state, but here in TN, the GC can still be held liable. Can is the operative word here... sometimes they do not enforce the issue and side with the GC if his record is clean and he demonstrates he has broken no laws or codes. Rule here, all subs must be paid before the GC is.

Sorry to hear about the window, but again, I urge you to be careful when naming names without proof. Especially when meeting with the rep. and others. Your best bet is to dig into your gut and pull out every ounce of restraint you can find so that when your meeting with the rep. and sub-employees you can try to show sympathy to their situation but provide proof that you did pay as per draw schedule backed up with documentation and that they are after the wrong man when seeking their pay.


Keep us posted on the outcome.

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Woman in a Man's World.

Double-A

This is the important part. Have you informed him in writing of the punch list to get his final payment? Have his folks shown up on the job site seeking to finish the punch list?

If they are not under your direct control, i.e., he pulled them off the job, then you can't really be seen as their employer. Find anyone that is not a litigant in this and bring them as witness that he ordered his men off the job. If the job is still incomplete, take pictures and be prepared to show them.

Did you call the equipment rental place and tell them that your subcontractor would be returning the equipment and not you? Do you remember who you spoke with?

Lawyering up is a good thing, but having a case is another. Do any and everything you can do by way of witnesses, paperwork, receipts, etc to support your case. Hell, ask your attorney if he can subpoena these creeps bank records. If he's written them checks for the same period, they have no leg to stand on. Also, if they cash their checks someplace, see if those records can be subpoenaed. Leave nothing to chance, cause they are betting on this.

One other thing... file a report of embezzlement with the local police department. If they are trying to get money out of you, without legal grounds, that's a crime.

dmkhnr

Since I'm a General Contractor, I don't have people working for me directly, so when I need laborers I use Labor Ready.
I went back and pulled out all my Labor Ready invoices dating back a year. Why would I hire people when I have an account at Labor Ready?
I even have invoice for the dates that they are claiming they worked for me. Why would I have Labor Ready come out if I already had laborers working. Furthermore, I am present when I have Labor Ready working. These employees weren't there.
DK

Peladu

Now I am wondering if their claim sticks and you get stuck...will you have to pony up for the workmans comp insurance for days that they were on your job?

joasis

I guess this is another time I love Oklahoma...back woods hick state we are, if someone pulled this with me, we would be

Actually, since they have to prove the claim of you being the employer, directly, then you probably will be in the clear...I would still lawyer up and if possible, file charges for attempted fraud before the hearing date...maybe even serve them with a civil suit...won't get you anything, but most people are deathly afraid of going to court.

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dmkhnr

I carry WC insurance. How do you prove you were on my jobsite. I'm the owner/contractor and there everyday, and I say you weren't.

Their claim to the Labor Commision was:
dmkhnr has refused to pay my boss, (their boss's name) who in return cannot pay me because he wasn't paid.

and
(Boss's name) turned in the final bills for the work completed and Mr. dmkhnr did not pay, so (boss's name) pulled us off the job and I have not recieved payment as of yet. I was to be payed an hourly wage of $20 per hr for 49 hrs work.

The second complaintant was his boss's shadow when he was bidding the job for me, came to 2 meetings with his boss, and was introduced as his partner, and a licensed contractor. Turns out he had a license at one time, and now it's not current.
Secondly, it asks him if he can afford an attorney. He marked no. You make $20 an hr, and can't afford an attorney. His boss is paying him cash, can he prove that he makes $20 an hr.

I'm not sure if I'll be able to question these guys, I'll be calling the commission this morning. Should the hearing go against me, as it's only an investigator questioning and making a decision, I'll be able to dispute and laywer up for the hearing.

Hearing is next week.
DK

Melissa

Have you tried showing the guys proof that you paid their boss? Like copies of the checks or something?

JMGP

I say that if he didnt/doesnt finish the job according to specs and/or agreement...

use what is owed to the contractor that left...hire another contractor to fix/finish the job... and pay the one that pulled off the job the difference... if he takes the check and cashes it... I assume he is agreeing to those terms...Right?

joasis

I bet you win and you have the ammo now to do it. If the clowns admit the boss is paying them cash, that is illegal unless a statement of earnings come with it. If the are "contract labor" , which is what cash would imply, they have a contract with the contractor, and not you. I would call your local IRS office and see if they may show some interest......I bet you will make the creeps wish they had something else to do when the IRS says AUDIT!

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pruane

You are not responsible for someone elses employees getting paid , EVER. Not even in NJ. The worst they can do is sue you. That wont happen.

cssconstruct

I agree with everyone else that you PROBABLY will not be helg liable. The disapointing thing about all this is the trouble you have to go through on a baseless claim. States need to toughen the rules on cases like this. It should state that that if you are found innocent and the claim is baseless the parties responsible for bringing the claim should be responsible for paying for your time and expense. I hate holes like that.

copusbuilder

To me it is a done deal. They are admitting here that they work for their boss? Not you...Unless you use them consistantly and they work for no one else I can't see them getting anywhere. Seems like you have a few loosers trying to bluff you.
Maybe it will backfire and get them

Of course workforce commision hearings or audits suck. Anytime some bimbo or government dork can affect your life it gets scarey.

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AkA Richard Cranium

dmkhnr

Well
I went to the hearing today and just as I thought, the Morons were screwed after the investigator asked the first question. "Who Hired You?"
She asked a series of question, that put them deeper and deeper into a self employed state. The Morons even had their boss come in and testify for them, and the a**hat told her that he was their employer, and responsible for the wages owed.
She explained to them that it wasn't me who owed the money, but their boss, and they just didn't get it. Actually in a sick way it was quite funny.

Now for the bad part,
The investigator explained to me that since I'm the prime Contractor on the job, that ulitmatley I'm responsible for any sub that doesn't pay their crews wages. She then said that they would have to chase down their boss, through the Labor Commission (which would not be a problem) the fines would add up to thousands of dollars by the time it went to court and a judgment was ruled, and when the boss doesn't pay, they can come after me.
Long story short; I could either gamble that they were going to stop at this decision, or make them an offer to settle. I opted for an offer of 50% their said work time, as my attorney would charge me more for dealing with this than it would be to walk away from it now. They both took the settlement $290 and $490, and released the claim.
The labor commission did help me out in the fact that they put their boss as the responsible party for the claim, and myself as the person who settled in behalf of a**hat boss. I can now sue in small claims court for this money, and would win, however, alot of time and effort for $800 that I'd never see.
I could have let it continue on, seen where the Morons took it next, but some things are just better to let go while it's easy and able.
So I didn't lose, but there was no justice for me. The investigator made the remark that I can now chase down their boss for the money (like she was doing me a big favor) I told her "I could care less about $800" and walked out.
thanks for the help,
DK

Mike Finley

Thanks for the update. Sounds like it was a mixed bag as far a you go. Make sure you call this contractor up in a few months and ask him how your employees are doing.

joasis

I would have rolled the dice and played it out. The fines that would have been accured would not have passed to you, only the original wages owed, plus maybe interest on the wages...I do not think it is legal for fines and penalties to be passed along the chain.

Thier boss was there, and the labor commission wasn't interested in why he didn't pay to begin with?

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