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  1. #31
    Join Date
    Oct 2006
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    Default Re: Subcontracting

    Quote Quoting Csiscool
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    All of my subs sign a subcontracting agreement and we require proof of business licensing and insurance.

    My question is, what happens when you have an individual who works as an employee for the LLC or as a Sole Proprietorship, or corporation. Where they do everything. (Their own equipment, Insurance’s and they are the one doing the labor).

    What are ways to protect yourself in these types of situations?
    If they have plenty of other clients, besides you, its not a problem. It only becomes a problem if you are their only client or if they only have a token amount of other clients. Even then, in most states it still might not be a problem, but it appears that under CA's new laws it appears to be a problem.

  2. #32
    Join Date
    Oct 2019
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    11

    Default Re: Subcontracting

    Quote Quoting llworking
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    If they have plenty of other clients, besides you, its not a problem. It only becomes a problem if you are their only client or if they only have a token amount of other clients. Even then, in most states it still might not be a problem, but it appears that under CA's new laws it appears to be a problem.
    So pretty much my option to avoid these problems in all states is to work with owner operators who have their own employees only?

  3. #33
    Join Date
    Dec 2009
    Location
    Lake Chapala
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    2,951

    Default Re: Subcontracting

    Quote Quoting Csiscool
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    So pretty much my option to avoid these problems in all states is to work with owner operators who have their own employees only?
    No, llworking didn't say anything about employees. He talked about clients - a whole different entity.

  4. #34
    Join Date
    Oct 2019
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    11

    Default Re: Subcontracting

    Quote Quoting eerelations
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    No, llworking didn't say anything about employees. He talked about clients - a whole different entity.
    Got it. So you're saying its best to work with any type of entity Individual, Husband wife team, actual corporation, etc. As long as they have their own clientele outside of my work?

    What is the best way to avoid laws in states using CA's new laws?

  5. #35
    Join Date
    Oct 2006
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    Default Re: Subcontracting

    Quote Quoting Csiscool
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    Got it. So you're saying its best to work with any type of entity Individual, Husband wife team, actual corporation, etc. As long as they have their own clientele outside of my work?

    What is the best way to avoid laws in states using CA's new laws?
    Only CA uses CA's new laws so other states are irrelevant. The bottom line is that an established cleaning business, whether they have employees or not is generally going to be safe for you to use as a subcontractor.

  6. #36
    Join Date
    Oct 2019
    Posts
    11

    Default Re: Subcontracting

    Quote Quoting llworking
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    Only CA uses CA's new laws so other states are irrelevant. The bottom line is that an established cleaning business, whether they have employees or not is generally going to be safe for you to use as a subcontractor.
    The plan may be to also work with other subs im in connection with in CA.

    How can i stay compliant?

  7. #37
    Join Date
    Oct 2006
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    Default Re: Subcontracting

    Quote Quoting Csiscool
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    The plan may be to also work with other subs im in connection with in CA.

    How can i stay compliant?
    Again, work only with established cleaning businesses.

  8. #38
    Join Date
    Oct 2019
    Posts
    11

    Default Re: Subcontracting

    Understood

  9. #39
    Join Date
    Oct 2019
    Posts
    11

    Default Re: Subcontracting

    I've been looking more and more into this.

    In California (Assembly Bill 5) states that

    (1) the work she performs is free from control of the hiring entity, (2) the work is outside the usual course of the hiring entity’s business, and (3) the worker is customarily engaged in an independent trade.

    (2) the work is outside the usual course of the hiring entity’s business is impossible for us to avoid. All of the contractors are performing office cleaning services and we are an office cleaning company.

    More importantly, Even established cleaning businesses can be soleproprietors or Single Member LLC's who chose to perform the labor themselves. And just because they are working sololey does not make them our employees because:

    We dont Control their work, We dont Make them wear our logos/represent our company, We don't provide equipment/insurance/supplies, etc.

    We are simply a company that acts as a Sales/Marketing/Billing company for other Janitorial companies.

    Does this AB5 law mean that we have to exclude any sole-proprietor or single member corporation from transacting business with us?

    I think this law was not thought all the way through. It definately will stop the exploitation on IC's (for those are exploiting them), but it will also negatively impact those who are operating LAWFULLY.

  10. #40
    Join Date
    Oct 2006
    Posts
    15,660

    Default Re: Subcontracting

    Quote Quoting Csiscool
    View Post
    I've been looking more and more into this.

    In California (Assembly Bill 5) states that

    (1) the work she performs is free from control of the hiring entity, (2) the work is outside the usual course of the hiring entity’s business, and (3) the worker is customarily engaged in an independent trade.

    (2) the work is outside the usual course of the hiring entity’s business is impossible for us to avoid. All of the contractors are performing office cleaning services and we are an office cleaning company.

    More importantly, Even established cleaning businesses can be soleproprietors or Single Member LLC's who chose to perform the labor themselves. And just because they are working sololey does not make them our employees because:

    We dont Control their work, We dont Make them wear our logos/represent our company, We don't provide equipment/insurance/supplies, etc.

    We are simply a company that acts as a Sales/Marketing/Billing company for other Janitorial companies.

    Does this AB5 law mean that we have to exclude any sole-proprietor or single member corporation from transacting business with us?

    I think this law was not thought all the way through. It definately will stop the exploitation on IC's (for those are exploiting them), but it will also negatively impact those who are operating LAWFULLY.
    A bill is not a law. A bill can eventually become a law if its voted on and passed, but at this point a bill is a proposed law, and one that might either never be passed or be substantially changed before it passes.

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