| In the cleaning industry, a sad
but true fact exists that few want to talk about; Many cleaning
companies operate outside both the law
and generally accepted business practices. The range is
astounding; from those who operate without license or insurance, to
those who illegally subcontract labor, to those who knowingly hire and
exploit illegal immigrant labor. Some ask, "if they're doing a good job, why does it matter?" Because an unlicensed company can cost a considerable amount of time and trouble when they disappear into thin air (often occurs because of the ultimate difficulties they run into, such as unemployment and worker's compensation claims, etc.) And the uninsured operator is putting you at risk because claims that should belong to the direct employer are often passed onto the customer who "should have known" the operator was not insured. Yes, there are those who are law-abiding and ethical, but the customer has the complex task of deciding who is telling the truth and needs better tools to do it. Below is a list of pointers that may help you discover whether your current contractor and/or potential contractors are operating legally and ethically.
BASIC CHECK LIST
Call the city business license office to verify the contractor is currently licensed. They may either do this by phone, email, or fax. 2. Insurance certificate Sounds easy, right? But wait - did you actually verify the information on the certificate? This could mean phoning, emailing, or even writing the insurance underwriter for information. 3. Insurance endorsement a) Require that your company be added to the policy as "certicate holder"..... this means you will be notified of changes or lapses in the policy. b) "Additionally insured" - "Additionally insured" makes the policy primary should the policy owner be liable for the claim. 4. Employee classification a) Statement in the service contract that all employees are 941 statutory employees. This statement should also include a statement that no work will be subcontracted without your express written knowledge and permission. b) Verify with the state unemployment insurance department's Employer's Accounts section that the company actually reports wages on employees. This will not be detailed but will let you know if they have ever paid in unemployment taxes. c) In interviewing prospective contractors, focus some questioning on payroll taxes, percentages such as the commonly known figures for unemployment taxes, matching employer-paid federal taxes and items such as filing dates and deposit requirements. Legitimate operators should know these handily, and have no objection to openly discussing them. Or they be able to refer you to someone in their company who knows the information. If that happens, you should follow up immediately, if not actually in the presence of the person suggesting the contact! 5. Employee pay Is your contractor paying their employees legally? Several items should come to mind here; a) Does the contractor pay minimum wage according to the law? b) Does the contractor pay at the minimum frequency required by law? (number of paydays per month) c) Are employees paid hourly, by the job, based on results, or what method? (this may provide clues about worker motivation) d) Additional incentives offered to employees for length of time or performance? While these pointers will not answer all your questions or revela the shrewdest of illegal operators, they will help you weed out the vast majority of them. The key word to remember is these are tools, not magical answers. |