Reading The Fine Print On Subcontracting Agreements
A reader recently contacted me asking about the benefits of signing on with a client as a subcontractor. I must preface my comments by saying that there are a number of factors to consider before becoming a subcontractor. And that it is important for readers to understand that I am not an attorney and cannot give legal advice. I encourage you to please review requests such as this, as with all contracts, with a qualified attorney who specializing in that line of business.
That said, in a previous article, we noted that the “standard” clauses in the subcontracting agreement described how much the contractor is going to pay for your services. They also allow for you to have other custodial business so long as you do not try to take this or other accounts they may assign to you. A non-compete agreement is usually enforceable but is oftentimes limited to very specific interpretation.
One concern is that it states that you will be paid once per month for the services rendered but does not require you to bill or invoice them. As a recognized, independent business you need to keep your own books/records of all services rendered as well as related expenses so that at tax time you have records of income as well as legitimate deductions.
They also require you to use their equipment which does not make sense if you are an independent cleaning service that should have access to your own tools and equipment. Finally, they are very specific on start/stop times which seems more like an employee than a true contracting service.
From what I see, they are hiring you as labor but passing on the tax burden to you. Please go carefully into this agreement.
Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean...
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net