Challenges Subcontractors Face
Subcontractors operate in a unique business environment where they must rely on the individuals and companies (termed “contractors”) who hire them. This reliance presents several financial and professional risks:
- Slow to Pay Contractors: Companies that consistently delay payments, causing major disruptions to the subcontractor’s personal and professional financial planning.
- Nonpaying Contractors: The most severe risk, where contractors completely refuse to pay for services rendered, potentially leading to heated disputes, civil action, or criminal charges.
- Job Misrepresentation: Hirers who are not “forthright and honest” and misrepresent the scope, requirements, or nature of the jobs they offer, leaving the subcontractor in a difficult position.
How Background Checks Help Subcontractors Earn More
Background checks are presented as the “single best way” for subcontractors to proactively vet potential clients and ensure financial stability by avoiding problematic situations.
Avoid Late Payment
Reveals a contractor’s financial history and past behavior, helping the subcontractor avoid those with a history of payment disruptions.
Avoid Non-Payment
Discloses past civil or criminal charges filed against the contractor or company for non-payment. Allows the subcontractor to infer details about the client’s reputation based on hard facts.
Verify Job Honesty
Reveals whether the contractor has been involved in civil court cases or faced criminal charges related to misrepresenting work, which is considered an offense in some instances.
Gain Insight
Provides “tremendous insight and information” into the character and history of the client before a bid is even submitted, ensuring the best possible outcome.
