Hiring a Painter – Subcontractor or Employees?
When I started my painting business, I was astonished by the unprofessionalism of some of my competitors. I don’t want this to sound like a rant, so let me state that there a many hard working and legitimate companies that are providing top notch service and following the letter of the law. Absolute Painting, Mountain Painting, ESP Painting, Sundeleaf Painting and Pearl Painters are just a few of the companies that I know that are out there doing it right. But, we’ve all heard horror stories about contractors and I’m going to address one particular area that really has me concerned about our industry.
When you hire a painting company, you may not be getting what you think you are paying for. If the painting company wants to dodge paying the high cost of workers compensation insurance premiums, then they will subcontract to their employees and file a 1099 form. What does this mean? If you are a subcontractor, you can work as a sole proprietor. As a sole proprietor, you are not required to carry work comp insurance. If you are working for yourself and you get hurt, that risk is on you as a business owner. It’ not like you can sue yourself. So, the painting companies are taking employees and classifying them as 1099 subcontractors, which is wrongly implying that they are individual painting companies. The problem is they are not licensed! If they are not licensed, they are not legal subcontractors.
If the subcontractor is legally licensed and carries general liability insurance, there is no risk to the home owner. That’s contract law – the risk is on the contractor, not the home owner. Not so true if they are not licensed. If they are not licensed, then there is no exemption for home owner liability. The onus in on the home owner at that point.
The bottom line is that if a 1099 employee that is not legitimately licensed were to get injured on your property, you could be held liable for that injury. Think about the implications if there was a serious injury or even death.
What can you do? Make sure that all subcontractors are legally licensed to practice in the state of Oregon by checking on the CCB website; http://search.ccb.state.or.us/search/ . Check with your contractor to see if they have employees or 1099 employees. If they have 1099 employees, run for the hills. A legitimate painting company is going to have their own legal employees and not a bunch of 1099 employees. Once in a while, a painting company will get too busy and hire another company as a subcontractor to do the work. In that case, you will need to check the subcontractor’s business detail to make sure they are not using 1099 employees as well. It’s a lot of work and unfortunately, almost impossible to monitor 100 percent.
Our policy at Sisu Painting, Inc. is that we never use subcontractors to do our work. We use our very own highly skilled and trained employees, who are all covered by work comp insurance. I recommend you hire companies that follow this practice.
Until next time,