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Super Moderator
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Discussion Starter · #1 ·
I was notified today that my hardwood flooring sub cancelled his work comp.

His work is outstanding and I really want to keep using him. But he does have helpers who deserve coverage.

I just spent over an hour on the phone with him explaining my objections to this, and he says he just can't afford it now.

I have no active projects with him right now (luckily), but I will pose this question to you.

Since I will not subcontract with him without WC, what are your thoughts on still recommending him outside the scope of my contracts and having him throw me a bone back. I'm a little confused here. Is it even ethical to recommend him to my clients knowing he has cancelled this? My feeling now is to tell him he just fell off my sub list. But I feel bad for him too.

I have a call in to my lawyer, but what are your thoughts?
 

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Al Smith
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simply deduct his % per hundred for future jobs when you pay him. Im sure he will pick it back up real fast when he figures hes being backcharged by the gross subcontract amount and not the labor only.


Since I will not subcontract with him without WC, what are your thoughts on still recommending him outside the scope of my contracts and having him throw me a bone back. I'm a little confused here. Is it even ethical to recommend him to my clients knowing he has cancelled this? My feeling now is to tell him he just fell off my sub list. But I feel bad for him too.
in a word, No
 

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Discussion Starter · #5 ·
Are you a general? Because depeneding on where you are can't he just slide under yours when you have work for him?
Yes, I am a general. I suppose that would work, but once you start getting convoluted deals going, things get too confusing. I don't want to get into the hardwood flooring business.

One idea I had was to just insist that he do the work personally (with no help) on jobs until he can get back on track. I just don't know.
 

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Average Joe
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Tough spot.

You're taking on liability either ways. I would err on the side of caution and regretfully drop him from my sub list.

Mind you, I'd be a liar if I was to say that I haven't used subs that weren't carrying proper WSIB and Liability in the past. Not anymore, and it's really hard saying that.

My former boss got hit with a $5000.00 fine for one of his employees that he was using. He would pay the guy as a sub and make checks out to the guys registered company. He had him employed for a few years, finally WSIB caught up with him and he's paying for it now.

There's too much liability in working with guys like your sub, not worth it. Think about the consequences to you in the end...it will help you get over feeling bad for the guy.:thumbsup:
 

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Average Joe
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Yes, I am a general. I suppose that would work, but once you start getting convoluted deals going, things get too confusing. I don't want to get into the hardwood flooring business.

One idea I had was to just insist that he do the work personally (with no help) on jobs until he can get back on track.
I just don't know.
He still needs a clearance certificate :thumbsup:
 

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Super Moderator
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Discussion Starter · #9 ·
Tough spot.

You're taking on liability either ways. I would err on the side of caution and regretfully drop him from my sub list.

Mind you, I'd be a liar if I was to say that I haven't used subs that weren't carrying proper WSIB and Liability in the past. Not anymore, and it's really hard saying that.

My former boss got hit with a $5000.00 fine for one of his employees that he was using. He would pay the guy as a sub and make checks out to the guys registered company. He had him employed for a few years, finally WSIB caught up with him and he's paying for it now.

There's too much liability in working with guys like your sub, not worth it. Think about the consequences to you in the end...it will help you get over feeling bad for the guy.:thumbsup:
He said I am the only contractor that seems to care about this. Damn, I wish his work wasn't so great. He is always on time, good with the customers, charges in the medium to high rate, and is "johnny on the spot" whenever I need him to repair a smudge on the floor due to sliding in a dishwasher, etc.

This is going to be a tough call.
 

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Home Builders/Contractors
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Yes, I am a general. I suppose that would work, but once you start getting convoluted deals going, things get too confusing. I don't want to get into the hardwood flooring business.

One idea I had was to just insist that he do the work personally (with no help) on jobs until he can get back on track. I just don't know.
Get your check book ready if you get audited. Nobody gets a check from my company without WC. Nobody. I learned the hardway when I was a kid. First timers fill out a W-9 and must provide me proof of GL/WC before I even cut a check.
 

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Discussion Starter · #11 ·
Metro, that's the way I do it too. On their first job, they fill out a W-9 and I tell them to have their insurance agent send me a GL and WC certificate. He was all fine until now.

I am reorganizing my business, and was following the steps recommended by my lawyer in regards to insurance certs, and since he had not yet responded I called him. That's when he told me about it.

How often do you request insurance certs. from your subs? By job, annually, or what?

Just curious, because I want to get a better system down for checking on this.
 

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Banned
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I'm no expert on workers comp. Out where I am, very few subcontractors carry their own comp. My understanding is, if they don't give me a copy of their certificate, they are covered under mine.

Another thing that was explained to me was, if the subcontractor carries WC, his workers are covered under his. But if the owner of the business gets hurt on my job, He, himself, is not covered under his WC, but under mine. I get a lot of conflicting info on how it all works. I haven't had a claim yet, I'll probably get a hard real life lesson sooner or later.

I'm out in Mass, I'm sure it's different in each state.

If this info is valid where you are, maybe you could back charge him the labor burden.

Also, I think if you are sent a certificate from the insurance company, they supposedly notify you if the coverage lapses. Not that I would recommend you trusting them 100%
 

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Home Builders/Contractors
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Metro, that's the way I do it too. On their first job, they fill out a W-9 and I tell them to have their insurance agent send me a GL and WC certificate. He was all fine until now.

I am reorganizing my business, and was following the steps recommended by my lawyer in regards to insurance certs, and since he had not yet responded I called him. That's when he told me about it.

How often do you request insurance certs. from your subs? By job, annually, or what?

Just curious, because I want to get a better system down for checking on this.
If I'm working and really cranking I ask quarterly. Only for the simple fact that when you get busy it's easy to forget. If I'm slow, it's every job.

Some guys wont tell you. Your lucky your guy let you know. I cut a plumber 50 G's one year and got burned. You dont even want to know how much. This guy was an awesome plumber and a friend of the families. Worked for my uncle for years (Albany International). He rolled the dice and it backfired. And I had to pay.

PS go to your Quickbooks and set up alerts (reminders) in your "To Do Notes" This is how I stay reminded for alot of things
 

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Discussion Starter · #16 ·
If I'm working and really cranking I ask quarterly. Only for the simple fact that when you get busy it's easy to forget. If I'm slow, it's every job.

Some guys wont tell you. Your lucky your guy let you know. I cut a plumber 50 G's one year and got burned. You dont even want to know how much. This guy was an awesome plumber and a friend of the families. Worked for my uncle for years (Albany International). He rolled the dice and it backfired. And I had to pay.
Wow, that sucks. He was a bit embarassed telling me this. I could tell.

When my lawyer calls me back, I have a feeling that he will just tell me to drop him and find someone else.

Oh the details we have to go through to run our businesses :wallbash:
 

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Registered
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How could you possibly recommend him if you legally and ethically cannot use him yourself. Although you also answered that, because of your referral fee.
Whatever he kicks you back will not be enough when things go pear shaped.
 
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