When it comes to contractors hiring, there are two different options: subcontracting and directly hiring. Subcontracting can offer contractors some warranties and hiring directly will require additional efforts from the contractor,but that does not necessarily mean that subcontracting is the better option. As construction lawyers in Tampa, we have put together a brief overview of the details of both options to assist you in making your decision.
In the construction industry, subcontracting tends to be the more popular method of doing business. Although subcontracting requires a few extra precautionary legal steps, it is one of the best ways to manage a job without incurring additional personnel or overhead costs.
Advantages of Subcontracting
- Frees up time for contractors to focus on their construction business
- Less expensive than hiring full-time employees
- A contract must be drawn up to guarantee warranties of the services being provided
- The contractor will gain more knowledge/resources
- Any subcontractors are responsible for bringing their own equipment
- Payroll taxes and benefits will decrease
- Legal liability will be transferred to the subcontractor
Disadvantages of Subcontracting
- Lack of staff development
- Contractors will use more time researching potential subcontractors
- Contractors will lose their control over the timeliness and quality of work
- Poor performance quality
Direct hiring is typically considered when it’s a routine construction job and the contractors want their own staff working on projects. Direct hire methods will provide an important asset for contractors, a staff.
Advantages of Directly Hiring
- Immediate results for the construction company
- The contractors get to set their own rules for the staff to follow
- Direct hires can be trained to work in different sections of the company
- Work hours and quality control can be better tracked
- A company that employs full-time employees as opposed to subcontractors may be more desireable
- Your employees are always available to work
Disadvantages of Directly Hiring
- Directly hiring will add overhead costs
- All equipment must be provided to full-time employees
- Full-time employees will have more rights compared to sub-contractors (this can also be a benefit)
- A contractor will be responsible for all training and resources
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.