# Subcontractor pay



## nclhs (Jan 25, 2015)

So here I am, discovering this fine place a bit late in my business venture. Wish I would have done a little more research before jumping in, but here I am. I'm subcontracted by a local contractor who gets most of the work from SG (don't start, I know better now lol). There is a good amount of work and the pay is not bad either...when I get it. They way this is working is that we don't get paid until SG pays the contractor we work for. Is that even allowed? Do we need to be on a schedule of some kind rather than a "you don't get paid until we get paid" type of deal? I get paid on a weekly basis, but lately it seems I am waiting 2 months to see anything for a job. I know this is a SG issue, but does that mean a contractor can just wait until they get paid to pay a sub? If it does, than that seriously blows. Not being able to predict my paychecks based on when work was completed is pretty stupid.


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## Ohnojim (Mar 25, 2013)

You should really attempt to get away from this arrangement. It's only a matter of time, before you do not get paid at all. It may not even be the intent of the guy you are working for to screw you, but things can snowball on him very quickly with this arrangement. If he can't finance his business now, he certainly won't be able to if things go wrong.


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## Wannabe (Oct 1, 2012)

NCLHS,

That's a "normal relationship" in the P&P field because 99% of Contractors are undercapitalized. Basically your "boss" won't or CAN'T afford to pay you until they are paid. Years ago your General Contractor would have used their own funds or have got a revolving line of credit to pay you once the job was finished BUT 99.9% of the Credit Companies will NOT issue a line of credit for Property Preservation due to repayment issues since you cannot "bank" on getting paid from Servicers. 

When I had a large P&P "Regional" we paid every Friday on ALL work completed the previous week. We had 168 Top-Of-The-Line SubContractors. We used our operating capital or tapped into a Credit Line to cover payments. When this business began getting filled with "fraudulent payments" is when we exited the business. 

Today these General Contractors have very little Skin in the Game thus there are popup companies everywhere everyday. In the arrangement YOU have YOUR pay is based off the business savvy of your employer--not a good business decision. 

As OhNoJim stated you should look for work elsewhere UNLESS your comfortable with the risk of not being paid? It happens to everyone eventually. 

Good Luck


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## nclhs (Jan 25, 2015)

Thanks guys, I kinda figured as much. And I am already at that point of possibly not getting paid. I have some invoices dating back as far as early September that are not paid. I recently ran into an issue that may result in me not getting paid for 6 man hours of work on a "follow up" that was something not stated to complete in the original work order. This property is in REO redemption. WO was wint and grass cut only. Did them both and got a follow up for ivy growing on the back fence. It's a 5' tall concrete wall with the ivy clearly planted there on purpose to climb the wall. SG manual says don't mess with ivy because it's decorative. Well now they want to say it's not decorative and they are calling it overgrowth. We show up and call the general cobtractor, and over the course of completing the job, they were claiming to be contacting SG for a POC for payment of extra work, then claimed that SG would not pay for it. 6 man hours. Ivy is not easy to remove. So we wasted half a day working for free. Is there a way I can squeeze my momey out of the general contractor since I technically work for them and not SG? Not my problem if SG doesn't pay them, right? Shouldn't I be compensated for work completed anyway?


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## nclhs (Jan 25, 2015)

And yes we are planning to get away from them as soon we can, but It's hard to when you get ALL your work through them.


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## Wannabe (Oct 1, 2012)

Yes you should be compensated. You work for the General Contractor --not Safeguard. You need to invoice the General Contractor for 6 hours labor at your areas "going rate" for General Labor. Most all estimating software has general labor at $34-36/hour. Your labor also includes drive time. Be sure to add your disposal time and actual dump fee to your invoice. 

Now your General Contractor will come back with some silly remark that Safeguard did not approve the work and you will need to inform them that you don't work for SG but for them and THEY did hire you to do the work. You may be fired so you need to be prepared.


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## Wannabe (Oct 1, 2012)

Just so we are clear: the $34-36/hr is per man.


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## Ohnojim (Mar 25, 2013)

Work is just work. What you want is pay. It will take longer to go broke sitting on the couch. There is always something you can do to make some money to survive, and wait it out. Rather than dumping your resources down a pit.


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## JDRM (Apr 16, 2012)

If that is all you have lost with him I'd say your doing pretty good, considering other horror stories we have heard. Eventually you will get it good though, i would look into better clients.:thumbsup:


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## nclhs (Jan 25, 2015)

Alright thanks for all the feedback, I feel a little better about my decision to go after the contractor for payment. They have been really helpful and sent us a lot of work so far but lately issues keep popping up. Didn't want to make waves unless I had to, but seeing as it seems like a common issue in this industry, I don't feel bad about it lol. We are heading in another direction and just working on getting our ducks in a row before we risk losing the work


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## cover2 (Apr 3, 2013)

nclhs said:


> Alright thanks for all the feedback, I feel a little better about my decision to go after the contractor for payment. They have been really helpful and sent us a lot of work so far but lately issues keep popping up. Didn't want to make waves unless I had to, but seeing as it seems like a common issue in this industry, I don't feel bad about it lol. We are heading in another direction and just working on getting our ducks in a row before we risk losing the work


 You're not risking loosing work, you will find work. Helpful doesn't mean chit when you have bills to pay. Get any sense of loyalty to these clowns out of your head now, they and any other regional or national have no sense of loyalty to any contractor and would drop you like a bad habit in a heartbeat. Just stop accepting work from them and when the threats come (and they will) start the liens. Trust me your regional has been paid for every job you did he is just using the most common tactic in the business, he is hoping you believe he hasn't been paid. He's probably sitting on a beach in Aruba sipping Mai Tai's (paid for with your money)while you are freezing your arse off doing a winterization for next to nothing in a house that isn't worth the price of the antifreeze.
Cut ties asap!!!


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## Ohnojim (Mar 25, 2013)

*He might be a good guy, he may have good intentions*



nclhs said:


> Alright thanks for all the feedback, I feel a little better about my decision to go after the contractor for payment. They have been really helpful and sent us a lot of work so far but lately issues keep popping up. Didn't want to make waves unless I had to, but seeing as it seems like a common issue in this industry, I don't feel bad about it lol. We are heading in another direction and just working on getting our ducks in a row before we risk losing the work


He can just run into so many issues with safeguard, and then you add whatever mistakes you, and possibly other subs may have made into the mix and it can get out of control very quickly. A few no pays and a good sized charge back and now everyone is hurting.


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## newreo (May 30, 2014)

Ohnojim said:


> He can just run into so many issues with safeguard, and then you add whatever mistakes you, and possibly other subs may have made into the mix and it can get out of control very quickly. A few no pays and a good sized charge back and now everyone is hurting.


There is something is happening with SG lately. The way they do things will take them down sooner or later. I highly doubt that things will stay unnoticed. They are unbelievable. Did you hear that they settle with IL and other states
http://www.illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html
http://www.theslaterfirm.com/2014/05/massive-settlement-reached-in-lawsuit-against-mortgage-company/
wonder if they try to recoup these 25 bln from constructors. They are really wrong thinking that they can do whatever they currently do and noone will slap their hand.


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## GTX63 (Apr 12, 2012)

I didn't read in either link that a nickel came out of the pockets of Safeguard.
The money is coming from the banks themselves and will go towards homeowner counseling, programs to avoid future foreclosures and paying back folks who defaulted on loans from a list of 49 banks between 2008 and 2013.


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## newreo (May 30, 2014)

GTX63 said:


> I didn't read in either link that a nickel came out of the pockets of Safeguard.
> The money is coming from the banks themselves and will go towards homeowner counseling, programs to avoid future foreclosures and paying back folks who defaulted on loans from a list of 49 banks between 2008 and 2013.


I don't know if SG paid or not however attorney general of IL was coming after SG directly. I am not sure why BOA would pay as they contracted with SG and can get away from the relationship if they don't like it once contract is up. The fact is that someone paid 25 Bln from their pocket, possibly it was a split deal, we will never know.


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## JDRM (Apr 16, 2012)

I can see their charge back department working hard...


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## Wannabe (Oct 1, 2012)

SG is going to pay but its not going to cost them a dime..... Every Contractor that has E&O Insurance with SG listed as an Additional Insured better break out the checkbook and be ready to cover their deductibles.... over and over and over.....


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## Cleanupman (Nov 23, 2012)

nclhs said:


> So here I am, discovering this fine place a bit late in my business venture. Wish I would have done a little more research before jumping in, but here I am. I'm subcontracted by a local contractor who gets most of the work from SG (don't start, I know better now lol). There is a good amount of work and the pay is not bad either...when I get it. They way this is working is that we don't get paid until SG pays the contractor we work for. Is that even allowed? Do we need to be on a schedule of some kind rather than a "you don't get paid until we get paid" type of deal? I get paid on a weekly basis, but lately it seems I am waiting 2 months to see anything for a job. I know this is a SG issue, but does that mean a contractor can just wait until they get paid to pay a sub? If it does, than that seriously blows. Not being able to predict my paychecks based on when work was completed is pretty stupid.



Any company wanting anyone to wait till they get paid...NOT solvent...
As others have said...it is only a matter of time...


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## nclhs (Jan 25, 2015)

Well I brought it up today and looks like I'm officially fired. Woohoo! I will be collecting every penny owed to me, over 5k. ALSO just found out that this company's general contractor license was suspended as of 1/5. Interesting...


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## newreo (May 30, 2014)

nclhs said:


> Well I brought it up today and looks like I'm officially fired. Woohoo! I will be collecting every penny owed to me, over 5k. ALSO just found out that this company's general contractor license was suspended as of 1/5. Interesting...



As a general contractor I am somewhere on the same boat as the guy who was paying you. We have some guys I am asking to wait as we are not able to pay 20000 before we get paid. It's pissing our guys off, but it's pissing me off as well. I would not fire though anyone who is asking to be paid though. I would negotiate. However, we are actively working on our exit strategy as well and I am rather downsize and just have the guys that depend on me for hours rather then have larger volume and have entire work outsourced for the jobs where my guys can do the work. If I will need a specialty guys, I will go on with specialty guys and the rest will be done by my crews. I am getting tired from the guys I was outsourcing the jobs to as he will tell me in the middle of the job (and it happens all the time) Oh, I am sorry, I made a mistake and I need more money. The guy can't calculate simple things and it's tiring for both of us.


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