Contractor Talk - Professional Construction and Remodeling Forum banner

1 - 10 of 10 Posts

·
Registered
Joined
·
2 Posts
Discussion Starter · #1 ·
I am a CGC in Florida that own's a construction co. I would like to close the company I own and quailify a new company that I do not own. I will work for the new company supervising projects and pulling permits on a as needed basis and getting paid for my services as subcontractor. Would this be legal as far as the licenseing board is concerned? And would it be smart to require the company to have performance bonds and payment bonds on projects?
 

·
Thom
Joined
·
4,137 Posts
What you describe is probably not legal. Generally a qualifier must be a full time employee and representative of the company he is qualifying. The point of the law is to insure that the person who qualifies the company is actually monitoring and controlling the work. By definition that is an employee, not a sub.
 
  • Like
Reactions: TAHomeRepairs

·
Remodeler
Joined
·
855 Posts
Yeah what thom said. The board usually wants you to be a 20% owner in said company , or a full time ( preferably salaried) employee. Much less and they will feel you lack the oversight necessary.

I think if you were to act as a "sub" and pull the permits here and there, you would have to do it yourself and act as the GC on said jobs.
 

·
Thom
Joined
·
4,137 Posts
My state laws are different than florida but, most state licensing laws are similar.

Generally a company may not market nor contract services that require a license unless that company has a license. That would preclude an unlicensed company from selling jobs then hiring licensed companies to do the work.

The whole point of a qualifying party is that that party accepts responsibility for insuring that all the licensing laws are complied with. That would include insuring that insurance and taxes are done properly along with permitting and doing the job properly. That by it's very nature is defined as management authority. Getting paid as a sub requires a separation of authority. It seems to me those two things are incompatible.

I wonder why you would even want to put yourself in a position of being legally responsible for things that are beyond your authority to control.
 
  • Like
Reactions: TAHomeRepairs

·
Registered
Joined
·
246 Posts
As a qualifier for a company, you must either be an equity owner or a W-2 employee.

As a 1099 or subcontractor, you would not be covered under the proper insurances. If a company is going to hire a subcontractor they must have their own license and then hire you as your company or as an individual. You must then license your company or yourself and hold your own insurances.

In a nutshell, no this is not legal.
 

·
GC / EC
Joined
·
42 Posts
If you negotiate a reasonable salary, you can license the company as a second entity and self-perform the actual work. Make sure that your own company is licensed in either case.
 

·
Registered
Joined
·
5 Posts
r3dko : I am new here and looking into licensing our company, looking for options. Can you please elaborate on "second entity" part?

--
The CSLB requires (and probably others states has similar), 32 hours of work or 80% of a weeks time is required for an RME or qualifier, however, it only says a "bona fide" employee. Is it possible for the employee to be paid on minimum wage PLUS a percent per job, OR a larger percent of supervision/control over the project and maintenance as RME. The process is covered by an agreement on both parties. If they take the larger percent, is W-2 still applicable?
 

·
Registered
Joined
·
7,076 Posts
...however, it only says a "bona fide" employee....OR a larger percent of supervision/control over the project....
The purpose of RME and RMO provisions is to allow a company the owner of which is not a license holder (for example any corporation), to use the license of an employee or officer, to obtain and execute work that requires a license. In return the company grants the RME or RMO full authority over licensed issues - code compliance, permits, quality issues. These provisions aren't intended as paperwork shortcuts to pull permits.

A bona fide employee is someone who is really an employee, who can truthfully say, "I work for company XYZ. When it comes to code compliance, permits, and other licensing related issues including contractual and business provisions, I run the show." If that's not the case, then the RME is a fool, and the arrangement isn't legal.

Judging by the number of people who come on here seeking rent-a-license arrangements, there are plenty of fools in the world.

Employee compensation can take many forms, but I'd think that piece-work arrangements where the measure is the number of permits pulled would be a red flag.

NOL: This isn't an attack on you. I spent some time over the weekend dealing with a prospective customer and her shady prior contractors, so this is on my mind.

I think it would be great to have one of the license gurus start a sticky thread about RME/RMO provisions, to aim people at when they have these questions.
 
1 - 10 of 10 Posts
Top