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What is a Subcontractor?

Electricians are usually subcontractors for construction jobs.
Carpentry subcontractors are often hired for woodworking jobs.
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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 06 October 2014
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A subcontractor is a person or a company hired by a general contractor to perform part of the work of a construction job. For example, a contractor might be building a house, but might hire a firm or a person specializing in electrical engineering to install the electrical systems needed in the house. Generally, the specialist will either relieve the main contractor of part of the building work or will be able to perform work at lower expense or at a greater skill level than the general contractor could.

Often, a subcontractor, whether an individual or a business, forms relationships with several general contractors. The general contractor does not employ the subcontractor as a regular employee in most cases. Instead, the person is either an independent contractor or is a company that provides its employees with required benefits like health insurance coverage.

Not having to extend benefits to a specialist only needed for one part of the job is one way that the general contractor saves money. If problems occur because of faulty work on the part of the subcontractor, however, usually the general contractor is held liable. The general contractor may attempt to seek redress with the individuals or companies he works with, or have defined terms in the contract between them stipulating that the liability would be more evenly shared.

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Frequently, though, hiring a subcontractor, or several, is a way to avoid problems in construction. Specialized workers like plumbers, electricians, or people who install heating and cooling devices, often called HVAC workers, tend to have more knowledge and training in their given field. While simply building something requires training and knowledge, people who are specialists better perform certain types of work.

The two types of contractors are served well by being able to form good working relationships with each other. For the general contractor, access to a reliable specialists can mean finishing jobs on time and on budget. For subcontractors, a good reputation among contractors means greater opportunities for consistent work.

A subcontractor often holds licenses in his or her specialty field. He or she might hold a general license to conduct work in a state or region, and also hold advanced licensing. Such licensing implies a certain amount of hours practicing his or her trade and knowledge regarding state building codes.

In some cases, people may also use this term to refer to a person hired for a few days of work, without a specialized field. Really, the more accurate term for such an employee is independent contractor. The person is usually a temporary employee of the contractor, hired to finish work on time, or to temporarily replace another worker who is ill. This worker may not have a general contractor’s license but may be hired for his or her carpentry skills.

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Discuss this Article

anon307946
Post 10

What is the responsibility of a sub contractor in case of VAT liability?

anon163092
Post 8

I have been working as a "subcontractor" for a year. My job is to serve tables, clean, set up, tear down for events, arrange flowers, and help in the kitchen, I get $10. an hour. It feels more like employment to me. I am not a subcontractor according to the definition. No taxes are deducted or paid from my bi-weekly check and I have to pay them at years end. No workers comp or unemployment benefits. Is this legal?

anon139048
Post 7

Thanks for the information.

anon103309
Post 6

i work as a subcontractor to a transport company. As per the WCB act i am their worker so if i don't pay my wcb it's the responsibility of the transport company.

anon84229
Post 5

If you are working for an employer as a subcontractor, are you or is the employer responsible for any equipment needed for the job(s)? i.e. machinery (bobcat, hoe, etc.)

anon67337
Post 4

I left a job where I was called a sub-contractor instead of an employee simply because the business where I worked wanted to save money, plain and simple.

They did not want to pay unemployment or disability taxes, nor did they pay their half of the Social Security tax. It was disgraceful, and it continues to this very day. There are certain criteria a person must meet to be considered a sub-contractor.

If you are an employer and you know that these people don't meet the criteria, don't assume the IRS will never catch on. Also, don't assume that the modern day slaves you have hired will put up with this forever.

anon43343
Post 3

Is a material supplier considered a subcontractor?

anon14626
Post 2

Are you a subcontractor if you are paid hourly and you have to do a job the contractor's way even if you normally perform your work differently?

anon11557
Post 1

this article is sweet... we now know everything there is to know about subcontractors! that adds to our already extensive knowledge of power washers!

-John & Tom from Home Improvement Inc.

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