You're Asked to Be Someone Else's Subcontractor: Decision Tree

Why this matters

A general contractor or a bigger shop calls and asks you to sub for them. It sounds like free work you did not have to sell, and sometimes it is exactly that. But when you sub for someone, you hand them control of your payment, your schedule, and sometimes your customer relationships, and you take on risk you do not have working directly for homeowners. The wrong sub arrangement can tie up your crew, pay slow or not at all, or quietly turn your best customers into theirs. This tree is the accept-or-decline on the offer itself, before you commit a crew to someone else's job.

Start here: who is asking, and can they pay?

The single biggest risk in subbing is not doing the work. It is getting paid for it. So vet the payer before anything else.

• If you know them or can check them (other subs who worked for them, their time in business, their reputation for paying on time), do that first. A GC with a name for slow-paying or stiffing subs is a hard no, no matter how good the job looks.
• If you cannot find out anything about how they pay, treat that as a warning. Subbing for an unknown means extending them credit on faith. Protect yourself with terms, a deposit where you can, and preserved lien rights, or pass.

You are lending labor and materials and waiting to be paid. Only lend to someone you have checked.

Check 1: do the terms actually work for you?

Read what you are being asked to sign before you fall in love with the volume.

• Payment terms. How long after you finish, and on what condition? Watch for pay-when-paid (you wait until the owner pays them) and pay-if-paid (you get paid only if the owner ever does, shifting their risk onto you).
• Retention. A percentage held back until the whole job is done, which can hold your money long after your part passed. Know how much and when it releases.
• Scope and extras. Is the scope clear, and what triggers a change order? Vague scope on someone else's job is how you end up doing more for the same money.

If the terms shove all the risk downhill onto you and they will not budge, that is your answer.

Check 2: is this genuine sub work, or are they hiring you cheap?

There is a line between subbing and being an employee they do not want to pay like one.

• A real sub delivers a scoped result, sets their own methods and hours, uses their own tools, and invoices for the work.
• If they want to set your schedule, direct your every move, supply everything, and pay you by the hour like a crew member, that is not a sub relationship. It exposes both of you to a worker-misclassification problem, and it means you are taking employee-level control with none of the security.

If the arrangement looks like disguised employment, either reshape it into a true scoped sub deal or walk.

Check 3: will this cost you your own business?

Subbing can quietly compete with the work you already have.

• Customer poaching risk. If the job puts you in front of customers who could become yours, or theirs, know who owns the relationship going in. A GC is right to protect their customer; you are right to protect yours.
• Non-compete or non-solicit language. Some sub agreements bar you from working directly for that customer later. Read for it, and price it in if it is there.
• Opportunity cost. Will this tie up your crew when your own direct jobs, which pay full margin and build your own book, need them? Subbing at a lower margin while turning away your own work is a bad trade.

Check 3 branch: can your cash carry the wait?

Even a good sub job pays slower than direct work.

• If you can float the labor and materials until the GC's payment cycle catches up, the wait is survivable.
• If one slow payment would make payroll scary, you cannot afford to have this GC be a large part of your book. Take a small piece, prove they pay, then decide.

Ordered recap

1. Check whether they pay, and how they treat subs, before anything else.
2. Read the payment terms, retention, and scope, and pass if the risk is all downhill on you.
3. Confirm it is genuine scoped sub work, not disguised employment.
4. Protect your own customers and your own direct work; watch for non-solicit language.
5. Make sure your cash can carry the payment wait, and start small with an unproven payer.

A sub relationship with a solid GC who pays can become steady, sold-for-you work. One with a slow-paying or controlling GC is a way to lend your crew out and get burned. The checks are how you tell them apart before you commit.

References

• American Subcontractors Association (ASA): subcontract terms and payment guidance
• IRS guidance on independent-contractor versus employee classification
• See related: What to Check Before You Sub for Another Company; Work Directly for the Owner or as a Sub to a GC: Decision Tree