Subcontractor or Employee: What’s the Difference?July 19, 2016
When you first look at the world of remodeling, it seems like there’s a whole lot of contracting going on. General contractors, independent contractors, subcontractors, what does it all mean? And most importantly, what does it mean to you?
What is a general contractor?
In the remodeling sense, the general contractor is in charge of getting it all done. Whether they’re a big box chain or a small local business, the kitchen remodeling companies that you met with are all general contractors. They are the ones that you make a contract with to do it all: organize all the materials, deliveries, tools and craftspeople.
The people who work with and for them can be either employees or subcontractors.
What is a subcontractor, and how are they different from an employee?
Employees are a part of the company you made the original contract with. With employees, the general contractor has control over everything that happens; what they do, how it’s done, when it’s done; it’s all in-house and personally directed by the company you contracted. The rules for the work are set by the kitchen remodeling company, or general contractor, that has agreed with you on what is to be done, how and when.
Employees allow for the best control of the what, how and whens of your project. Standards regarding deadlines, cleanup and workmanship are more likely to be consistant throughout a company. There are other advantages to having a company-managed team. A pool of employees can be flexibly pulled from on basis of their particular expertise, personal availability and the project’s timetable. If one employee is sick, another can come in, avoiding any delays in the project. Employees are also bonded and insured through the company, so you know that each craftsperson’s conduct, work quality and safety is accounted for.
Subcontractors are independant operators that are sign a contract with your general contractor to do a particular part of the job. Subcontracting can be a great way to bring in specialists , but with that comes another set of considerations.
Subcontractors have their own ways of doing things and aren’t bound by anything that isn’t in their agreement with the general contractor. They still do the work, but when and how is not necessarily under the direction of the company you have an agreement with.
Liability is an area that is very clear when it comes to the employees of your contractor, but can be fuzzy when it comes to subcontractors. Brett Cohen breaks down some of these details in this video:
So what should you do?
As always, that’s up to you and there’s no right answer for everyone. For the most part, just ask questions. A good kitchen refacing or remodeling company will have answers.
By going with a company that has its own employees, you don’t have to do as much legwork. You get to skip reading the fine print and checking up on these secondary contractors.
If they do subcontract, they may be simply finding the best craftspeople they can for your project. There are things you can do to make sure that any subcontracting won’t be a detriment to you. A separate subcontractor agreement, or agreement of best practices for subcontractors, will extend the quality you expect of your primary contractor to anyone that they hire on your job. Confirm that any subcontractors will be bonded and insured, both for their work and for workman’s comp. This is the best way to ensure that all work that they subcontract will be on par with that of their own employees.
Subcontracting is a common practice, but not a universal one, among kitchen remodeling companies. Be sure to ask the companies you interview how they hire and about these liabilities.