Who's really building your project?

Not knowing the answer to this question may cost you more than you know.

So, you have successfully navigated the tedious processes of getting your building project designed and financed. And you've survived the contractor bid procedure. At long last, you have selected a general contractor in whom you place your confidence for erecting your building on time and under budget. Now the ball is in the GC's court. Right?

Well, maybe not entirely. You may have lingering issues of liability you weren't even aware of.

Your subcontractors and sub-subcontractors (some you may have never heard of) can cripple your project if they use fraudulent payroll schemes or unlawful employment practices. These schemes and practices have become more prevalent with the advent of "labor brokers" -temporary employment intermediaries who supply construction labor to subcontractors.

Many labor brokers are individuals with no particular construction skills or any business acumen, aside from possessing a list of readily available construction workers. Labor brokers are notorious for routinely and systematically violating tax laws, workers' compensation requirements, etc., to line their own pockets.

Their violations could affect you: stop-work orders that shut down your project; increased scrutiny from government investigators; mechanic's lien filings made by unpaid or underpaid workers; or other unwelcome surprises.


Contractor Profile: Murray Drywall and Insulation of Texas, Inc.

Albino Balderas was born in Mexico, but he has been residing legally in the United States for more than a decade. He came to the United States in 2002, seeking a better life for his family. He wanted to provide the kind of future for his children that seemed elusive in Mexico. He came to this country with little more than his carpenter tools and the change in his pockets. He was chasing the American dream. He never imagined that what would happen to him would launch a federal investigation or would make him a plaintiff in a federal lawsuit.

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NEA Baptist Memorial Project

Baptist Memorial Health Care Corporation Sets an Example

Despite some initial reluctance to involve itself in a wage dispute involving Murray Drywall, BMHCC ultimately recognized that its own best interests would be served by severing ties with the contractor. [Click here] to see the letter from BMHCC Senior Vice President Gregory Duckett to Murray Drywall owner Grey Murray, in which Mr. Duckett declares Murray Drywall ineligible to work on any future BMHCC construction project. Kudos to BMHCC for taking a stand against abusive payroll practices and against the use of shady labor brokers. BMHCC is a shining example of responsible and ethical corporate governance in action. We encourage all construction end-users to follow its lead.

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