Hiring an illegal contractor may seem like a good idea. There are plenty of them out there, especially in this tough economy. And hiring one seems like it can save you money because they don’t have to pass on the costs that above-board contractors do including:
- Workers Compensation Insurance
- Unemployment Insurance
- State Business Taxes
- Sales Taxes
- Business and Contractor’s License Fees
- Permit Fees
- Liability Insurance and Bonding Costs
Unfortunately, YOU are taking all of the risk when you hire an illegal contractor! Did you know that you:
- Can be sued by the worker of an illegal contractor if that worker is hurt on your job?
- Can be liable for paying for Workers Compensation premiums for the workers on your job if your contractor doesn’t pay their premiums?
- Are responsible for paying all applicable taxes for the contractor if the contractor does not pay their taxes on your job?
- Can be liable for paying unemployment insurance if the contractor does not?
All of this applies to even the smallest job – A plumbing repair, a simple electrical issue, or a furnace or AC repair. And this includes the worker that you pick up in the parking lot at the big box store. If they get hurt while working for you, they can sue you for medical and lost wages as a result of that injury.
Not only are you taking all of the risk with employee and tax liabilities, but if there is a problem with their work, you have no recourse. The State Department of Licensing can’t pull their license, because they don’t have one! There is no bonding company to cover the costs of repairing their work, and they have no liability insurance for the damage they can cause.
So how do you protect yourself? Make sure to hire legal contractors for all work that you are not doing yourself.
- For contractors in Washington State, go to https://fortress.wa.gov/lni/bbip/Search.aspx and look up the contractor. Click on the contractor’s name for more detailed and important information:
- Does the name and address match your contractor?
- What is the Contractor’s status? If it is other than “Active” something is wrong.
- Verify their “Workers’ Comp Premium Status”. If their account is not current, something is wrong.
- Plumbers and electricians in Washington State are required to have their license on them at the job site. This license demonstrates their ability to meet State requirements for the work they are doing. Ask to see this license and verify their status at https://fortress.wa.gov/lni/bbip/Search.aspx
- Most contracted work, including most plumbing, electrical and HVAC work requires a permit. This is for your protection, as it ensures work is inspected by a third party, and meets all code requirements. If the contractor tells you a permit is not required, call your local municipality’s planning or code enforcement office and verify this.
- All required permits should be posted at the job site. If they are not posted, or were not provided to you, verify the permit was pulled before you let work begin. This can save you from significant delays, and additional costs from fines, etc.
An ounce of prevention is worth a pound of cure. Investing a little time up-front to make sure your contractor is licensed, bonded and insured, that you are protected from liability, and that the work being done at your home is properly permitted and being done by licensed contractors and trades-people can save you time, money and more in the end.