Subs in the Mix

Quick, what’s the difference between a contractor and a subcontractor? Of course you know. You’ve probably been both, and you may still be installing jobs under a general contractor as well as selling and installing your own.

But though you’re clear about what the term means and how it defines a relationship and the obligations that come with that relationship, your homeowner client may have no idea. Or worse, your client may assume that “subcontractor” means something like substandard, subnormal (as in temperatures), someone working for a subsidiary, sub something, or anything except substantial. A lot of meaning lurks in that one-syllable prefix, which comes from the Latin for "under."

So You’re Using Subs?

If all your work is installed by people who are on your payroll, you have no need for subcontractors—a term the remodeling industry tried to shelve some years back by slipping in the substitute “trade contractor.” But that never really caught on with the general public. A homeowner may ask if you plan to use “subs,” but it’s not likely that they’ll ask about your use of “trade contractors.”

But if you go beyond selling and installing one or just a few products—or even if that’s exactly what you do—you’ll likely need to hire skilled workers to perform those tasks. And if you’re selling against a competitor who has his own workforce, it’s possible that the subject will be raised in the sales process. It’s good to have a quickly comprehensible explanation.

Heather Kolich, at How Stuff Works, has an analogy that will go far toward clarifying who’s a “sub” and why they’re working for you: “If you hire an event planner for a wedding, golden anniversary or other celebration,” she writes, “you don't expect him or her to bake the cake, cook the meal, grow the flowers or play the music. You pay the planner to use his or her knowledge of the industry and organizational skills to bring together the best baker, caterer, florist and string quartet in a coordinated effort to make your event successful.”

A client coming across the lead-generation website Home Advisor, formerly known as Service Magic, will see it explained this way: “A home improvement contractor is usually tasked with smaller, though no less important items, such as installing new windows, flooring, cabinets, siding, landscaping, etc. A good way to think of a residential general contractor is that he is in charge of home improvement contractors, or what are referred to in the field as ‘subcontractors.’”

The Real Issues

That may satisfy, or it may not. Know that the client’s real fears likely come down to two things: 1) that the quality of the work will suffer, and 2) that they won’t know who to call in the event of a question or complaint.

To the first issue, a strong subcontractor agreement, covering timelines, fees, worker’s compensation, and an indemnity clause that specifies that the subcontractor isn’t responsible for your mistakes allows you to ensure that whoever you hired to install will get it done for a set amount by a certain date. You likely wouldn’t be talking to them if you hadn’t seen their work and what you can tell your client is that you’re familiar with it and that it meets your company’s standards. That said, don’t make the mistake of trying to tell the installers how to do their job. (Check this list of specific Dos and Don’ts from the IRS.) Implicit in the description of a subcontractor is that they already know how to do the job. That’s why you’re hiring them.

Who’s in Charge Here?

To the second question, if clear lines of authority are established and communicated, you’re well covered. So let both the client and the installers know what are the rules on your jobsite. TheContractorsGroup.com publishes a list of rules and suggests that these be attached to the subcontractor agreement.

You don’t want or need your customer and your installers bickering about smoking, litter, or a loud radio. That will get around fast. When jobs get tangled in dispute, it’s rarely about the quality of the work; it’s almost always miscommunication that’s at fault.

A less irritating but more important issue is safety. Yes, you sold the job and the jobsite is your responsibility, but safety rules for subcontractors are spelled out by OSHA.

Those working for you need to understand that those rules are their responsibility to follow. Moreover, having worker’s compensation—as spelled out in your agreement—should be nonnegotiable. States will fine companies for using workers without worker’s comp and, in the event of an injury, both you and your homeowner client—whoever has assets—could be subject to suit.

If all pieces are properly in place and there’s an issue, that should be between you and the subcontractor. Let the client know that in the event of a question or a problem, your phone (or your foreman’s, or project manager’s) is the one to call or text.