Massachusetts Construction Projects – The Role of the General Contractor
Homeowners and commercial property owners depend on general contractors to handle construction projects on a regular basis. Many people believe that general contractors perform the actual construction work themselves; this is not usually the case. In fact, most Massachusetts general contractors simply coordinate subcontractors from other construction companies to perform the work at their jobs and never actually do any physical labor. The problem with such a business practice is that:
- it is illegal in Massachusetts (see below); and
- homeowners or commercial property owners are not receiving the construction services from the contractor they agreed to hire – the contractor who’s experience they concluded was appropriate for their job – the contractor with whom they discussed their project and discussed the work they want done.
Construction projects in Massachusetts and elsewhere usually involve a significant financial investment from the property owner to fund the work. That is precisely why there is a lot at stake when things go wrong at a construction project in Boston or anywhere in Massachusetts. Knowing your rights as the property owner and understanding the proper role of a general contractor in Massachusetts is essential to protect your property, your finances, and your legal rights.
The Responsibilities of a Massachusetts General Contractor
In most states, General contractors first meet with the property owner or tenant at the property where the proposed work will be done. During this initial meeting there is a discussion about the plan for the job, the cost of the job, and an estimated timeline for completing the job. Thereafter, a construction agreement is usually signed and the general contractor commences the project. The general contractor is responsible for managing the project budget, coordinating with an architect, designer, plumbers, electricians, etc…and getting the construction work properly completed by the project deadline. However, as noted above many general contractors do not provide the actual construction work themselves and do not have employees who provide the necessary construction work – all the services are provided by “subcontractors” with whom the property owner has no relationship. In Massachusetts, the practice of using “subcontractors” is a serious problem because of the very restrictive work classification laws in Massachusetts.
The Use of Subcontractors by a General Contractor in Massachusetts
The subcontractor – general contractor relationship on most construction projects in Boston and throughout Massachusetts can be summarized as follows:
- The general contractor (the “GC”) is the contractor who was hired by the property owner and the subcontractor is simply another contractor (from a different company) that the GC has hired to perform work at the subject property.
In this model situation the subcontractor is usually treated as an independent contractor who is working for the general contractor. The “independent contractor” classification saves the general contractor significant monies on insurance costs and payroll taxes. However, this practice is illegal in Massachusetts because all workers (with very limited exceptions) are considered employees under the law unless the all of the following elements are satisfied:
“(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
(2) the service is performed outside the usual course of the business of the employer; and,
(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.” M.G.L. c. 148B(a).
The second part of the above test (i.e. “the service is performed outside the usual course of the business of the employer”) is very difficult for general contractors to satisfy because general contractors are in the business of providing construction services and the subcontractors are being hired to provide those very construction services – those are services within the usual course of the general contractors business. Therefore, subcontractors in Massachusetts are employees under the law even if the general contractor treats them as independent contractors. This issue of misclassifying employees carries severe penalties. As a Massachusetts property owner, being aware that such a business practice is illegal can provide you with leverage over the general contractor should a dispute arise – such leverage can help the property owner settle their dispute on favorable terms. The experienced construction attorneys at Calabrese Law Associates in Boston, Massachusetts are experts on the laws that apply to Massachusetts contractors and to Massachusetts construction projects. Our firm handles a broad scope of construction law related matters for property owners and contractors and we have been providing construction clients with great results for years.
To get assistance with general contractor dispute, contact Calabrese Law Associates. Businesses and homeowners who utilize our firm receive industry-leading legal representation and professional. Schedule your consultation with an attorney today.