Legal Contracting 101

In contracting temptations to break the law are frequent. Here’s a short list of what’s required to contract legally:

  • Contractor’s license
  • Contractor’s license bond
  • Worker’s compensation insurance for all employees. 
  • Liability insurance

The greatest temptation for lawlessness, however, is unreported wages. These are wages that are paid directly to workers in cash. Thus, they are undisclosed to agencies that require them to be reported. Those agencies include:

  • IRS
  • CA state franchise tax board
  • Worker’s compensation companies

Buyers should beware. For example, if a worker is injured on a job-site, and no worker’s compensation insurance exists, the property owner may be liable. Further, levies for unpaid taxes may be placed against an owner’s property.

Make sure your plumbing contractor is licensed, bonded, insured and executes their payroll in a law-abiding fashion. Anything less is a detriment to the area economy and is illegal. 

Submitted By Dale Maples, owner