When a project owner in Massachusetts is working with a contractor on a construction project, the contractor has the option of either entering into further construction contracts with subcontractors who will perform specialized work on the project, or the contractor can directly hire an employee. There are pros and cons to each choice.
Subcontracting may be preferable if there are parts of the project that require work that the contractor is not experienced in, such as electrical work. Subcontracting also means that the contractor has the time to focus on growing their enterprise. Depending on the circumstances, subcontracting may be less costly than hiring a full-time employee, especially since the contractor need not provide employment benefits to the subcontractor or pay payroll taxes. In addition, when it comes to subcontracting, it is the subcontractor that is performing the job and who will be legally responsible for that job.
However, there are benefits to directly hiring as well. Hiring a worker will allow for the continuity of the contractor's plans. The contractor can set the rules their employees must follow. Employees may also be able to take care of numerous projects, instead of just one, or, if preferred, they can be trained to perform specific duties related to the project. Contractors who hire workers can exercise more quality control over their performance and have more control over the cost of the project.
Thus, contractors will have to carefully consider whether they want to subcontract or directly hire employees. Executing the contracts needed for a contractor to subcontract work is a legal process, but there may also be employment contracts that need to be entered into if a contractor directly hires an employee. Attorneys can provide guidance to contractors, so the contractors can understand what their legal duties are if they subcontract versus hiring an employee.