What is a Subcontractor?

construction subcontractor

A subcontractor is a person or a company hired by a general contractor to perform part of the work of a construction job. For example, a contractor might be building a house, but might hire a firm or a person specializing in electrical engineering to install the electrical systems needed in the house. Generally the subcontractor will either relieve the main contractor of part of the building work, or will be able to perform work at lower expense or at a greater skill level than the general contractor could.

Often, a subcontractor, whether an individual or a business, forms relationships with several general contractors. The general contractor working with a subcontractor does not employ the subcontractor as a regular employee in most cases. Instead the subcontractor is either an independent contractor, or is a company that provides its employees with required benefits like health insurance coverage.

Not having to extend benefits to a subcontractor is one way that the general contractor saves money on a job. However, if problems occur because of faulty work on the part of the subcontractor, usually the general contractor is held liable for such problems. The general contractor may attempt to seek redress with the subcontractor, or have defined terms in the contract with a subcontractor stipulating that the liability would be more evenly shared.

Frequently, though, hiring a subcontractor, or several, is a way to avoid problems in construction. Specialized workers like plumbers, electricians, or people who install heating and cooling devices, often called HVAC workers, tend to have more knowledge and training in their given field. While simply building something requires training and knowledge, people who are specialists better perform certain types of work.

The subcontractor and the general contractor are served well by being able to form good working relationships with each other. For the general contractor, access to a reliable subcontractor can mean finishing jobs on time and on budget. For the subcontractor, a good reputation among contractors means greater opportunities for consistent work.

A subcontractor often holds licenses in his or her specialty field. He or she might hold a general license to conduct work in a state, and also hold advanced licensing. Such licensing implies a certain amount of hours practicing his or her trade and knowledge regarding state building codes.

In some cases, one may also refer to a person hired for a few days of work, without a specialized field as a subcontractor. Really the more accurate term is independent contractor. The person is usually a temporary employee of the contractor, hired to finish work on time, or to temporarily replace another worker who is ill. This type of subcontractor may not have a general contractor’s license but may be hired for his or her carpentry skills.