Been in business for about a year. Built it up, lots of service work and made some clients. Got the electrical repairs on a large apartment complex reroofing project. Put in my resignation a few weeks ago and I am out on my own.

Supposed to be paid weekly. Turn in invoices on Thursday, and get paid the following Friday the next week. I agreed to this. But my supply accounts don't have a high credit limit due to my short time of being in business.

First payment wasn't there, but after having a meeting with the owner he reluctantly paid me for a few of the invoices but not all. The next week the same. I'm just trying to get an idea of what the holdup is, because I'm still working on the project, and I honestly don't know why the checks aren't there. All I can get out of anyone is "waiting on the surety" and the bond company hasn't released the checks yet.

Not sure where to go from this point, everyday I'm asking and being told I will get an answer, only to no avail by the end of the day no one is available and no one returns my voicemails.

It's getting to the point where this can't keep going on. So far they've paid about 20% of the balance due on invoices which should be about 90% paid at this point.

Any suggestions, I don't want to lose the project, it's the biggest one I have, but I don't want to go much farther in the hole at this point either. And it's only been 3 going on 4 weeks.

There is nothing wrong about asking for the money they owe you. Companies, and some real big ones, use accounts payable as a place to juggle their cash flow. They will keep their money as long as they can, at least until the next reporting period. You really need to be the squeaky wheel and let them stiff someone else. If this company is in trouble and big is no indication, you don't want to be holding the bag too long. Best case is they are just slow and have your money held up to make a quarterly number, worst case is they just don't have it.

From what little info I've been able to get, it sounds like they don't have the money, they are blaming the bonding company for not paying me. I'm confused because that's not how I thought a bond worked. I was expecting the GC to pay me directly. At this point I am worried they are just stringing me along but it makes little sense. I bid the job very low, and the only way I can even afford to do the job at this price is that I have almost no overhead costs. So I can't imagine them finding a better deal very easily from another EC. I'm sure they can find one, someone will always bid it lower, but I don't think it will be easy for them.

Here's your job - perform the work.

Here's their job - deliver the checks.

I would stop work. They have! They have stated that there is a reason that they have not given you your check. The fact that they haven't given you your payment is a good reason that you can no longer continue to give them your hard work.

Look, I know it's not as easy as that at first because you want to work and you want to have work, but it's an unfortunate reality of being in business - people will try to take advantage of you. The only way to win in those situations is to remove yourself from the game they are playing with you.

One of two things will happen: they will decide that it's time to pay you so they can complete the job or they will not pay you and hire someone else to not pay. You have to decide if you trust them, but at this point it looks like they're string you along. The time you spend not getting paid on this job is time you could be pursuing paid work elsewhere.

Whatever you decide to do, best of luck to you and I hope you get your money!

A few things I've observed the past few years ....

I have seen situations where the sub got paid weekly - he either got paid when he turned in the bill / that Friday ... or he didn't show up Monday.
On one job, the moment the customer started hemming and hawing, the crew began taking apart what they had built. "Until you've paid, it's ours." They got paid. In full - but not after a few go-rounds of counter offers, etc.

On another job, a sub didn't get paid. Indeed, he and the GC had a difference of opinion as to the amount due. The sub complained to the contractors' board, was paid from the bond posted by the GC, and the GC had his license suspended until the bond was made whole.

In a number of instances, various firms - both large and small, all "respectable" - turned out to have company policies to not pay bills, period, for 60 or 90 days. Mind you, these same firms were real careful to collect from their customers immediately.
My position is straight from the old saying: I have an arrangement with my bank. They don't do electrical work, and I don't make loans. Such folks don't get me to work for them a second time.

Could you build such a 'float' into your pricing? Perhaps. Indeed, I charge new customers "full price." If I have any doubts as to their sincerity, the price goes up. Only when a customer has proven to both provide regular work, and pay promptly, do I 'sharpen my pencil.' Just yesterday, as an example, I 'ate' the hour it took to gather parts for such a customer. I have the check for that job already.

Good advice from Reno, as always...

BTW, if the GC hired you and you have a contract with him, then it is he who must be sure that you are paid. No "if", "ands", or "but"s about it. It is also he who needs to be reported to the contractor board if payment is not received.

You DO have a contract, right? If the answer is no, then you need to cease all work immediately until you have a signed contract for any further work, even if they pay you for what you have already done. DO NOT WORK WITHOUT A PAPER, SIGNED CONTRACT. If they have any problem signing a contract, run for the hills my friend. There is no bigger red flag than that.

Good luck!

We don't have a contract, I invoice each repair I do for them and charge by the hour. I have a flat rate I have given them on service repairs because they are all the same. I invoice them weekly. And yes, if they don't pay I have no choice but to cease all work.

My main question is, why would they be using bond as an excuse to hold up payment? Why would the surety pay subcontractors? Does that sound like a legitimate excuse?

There really is no legitimate excuse. If they are really having problems getting the money to pay you, that is unfortunate for them, because they can no longer afford to have you performing any more work for them. There really is no grey area there.

Eventually, you will learn to let excuses go in one ear and out the other. If you didn't provide the work and still wanted to get paid, they would NEVER even consider writing you a check, no matter what excuse you gave them. Why should you conduct business differently than they would?

If you don't pay your cell phone bill, they stop providing you with the service. It's really simple and really effective.

You can still have a contract signed ahead of time even when working like this. The contract would specify the hourly rate, the markup on materials and the payment terms. The contract would specify that you are to be paid weekly and what will happen if you're not. It's hard for them to dispute this when you have a signed contract from them agreeing to these terms.

There's no reason not to have a signed contract even if you're working on a T&M basis.

Yup you always need a signed contract, and we do a credit check on the GC's to be sure they have the means to pay, most of the subs in this area work Day Rates for the GC's paid at end of day or no show the next day until the previous day is paid in full.

I see a real problem, when you say you have no or low overhead, then something is wrong with your operating practices, are you fully insured general libality, workers comp, and you must have a magic carpet, because our trucks equipped with tools and material are a killer expenese.

Bid low and you will always get your foot blown off.

You can learn the greatest things from the most unusual places ....

If you saw the movie "Goodfellas," you saw a film based on the biography "Wiseguys." It is the story of a half-Italian kid, growing up into a fringe role in organized crime.

His mentor would often front the money to start a small business, such as a restaurant - then show up every week to collect his payment. According to the author, the same story played out again and again. After a few timely payments, the guy would come up short one week. A drop in business, unexpected expenses, all manner of stories. Some might even have been real. Yet, the response of the mobster was always the same: "Gee, that's too bad. Now where's my money?"

I think you see the point here. The whole purpose of working is to get paid. If you don't get paid, you won't be able to continue operations.

That said, be aware of what your local laws allow. For example, the fine print of our contracting law can allow the customer as much as 30 days to pay (depending on circumstances). You may not just 'stop work;' you need to have a 'legal reason.' Since the Contractors' board is not very explicit as to what they consider a 'legal reason,' you don't want to act rashly. A call to your board might be the best dime you'll ever drop.

I've been in the same boat before. It stinks. Your main problem here is you don't have a signed contract...The simplest thing to do is tell the G.C. you need to go take care of other jobs,and you may be off site for an undetermined amount of time. they will either expediate paying you or there will be some other guy there the next day. either way... your not giving away your services. The other thing that others have touched on here. Alot of larger companies don't pay the day they recieve the invoice. I've heard of a 90 day period. I personally would not do any more work for them, because i o u's don't pay my bills, not sure about you...

As others here have said, you need to do a few things now,
1) get a signed contract.
2) Find out who the bonding company is
3) Inform them that work will not resume untill all invoices are paid up to date.
4) future late payments will have late payment fees added and all work will stop untill paid in full including late fees.
5) find other work some place else.

First, u can't take down work you've put up. Once it's installed, it's no longer yours. Taking it down is illegal.

Walking off the job will result in contract cancellation in which you may never get paid (tried that one). They'll take your money and pay the next guy. Watch the contracts carefully, especially the AIA ones. They're not written fairly and take the side of the GC in all cases. You'll go broke signing them.

Clause like 'pay if paid' and no definite payment dates have always killed me. Ever wonder why the GC has a nicer office than you?

The bond company may take years to get money from (if at all), don't count on that as a guarentee. They have floors of lawyers that work at finding ways of not paying out.

We prefer to work for the owner and not dilute the relationship thru the GC.

No kidding. I'm spending over $30K a month in just basic overhead and that's without keeping fat inventories like I used to. Insurance and gasoline are out of control all by themselves, not to mention multiple licenses, exorbitant permit fees, office utilities and rent. I'd love to have low or no overhead, but it's against the law to operate that way in these parts.

GC's make their money off of their subs and they will squeeze them as much as they can. It is a fact of life. If you don't nail them down from day one, you will always be a puppet on their string. If you are good and offer fair (realistic, not low) pricing, they will respect your position and work with you. They need you as much as you need them. The low ballers are the ones that thy love to jerk around because they already know that you are desperate to be selling work for less than market value.

Price= Market value, not what low or no overhead allows. When a GC sees prices that are too good to be true, sure they will take advantage since low prices are usually indicative of a low budget for legal representation.

Too " low budget for legal representation."

Pretty much says it all.

This post just made me want to pay the 200+ an hour for the legal fees and go after the GC that did not pay me my final check. I am sick of the empty promises by this GC that owes me money. It sucks that con artist losers get away with crap like this. Honest people are becoming very hard to find.

Willfescon,
something is really wrong here... bonds don't kick in until a bailout is requested. if you have a long (one year) track record with this contractor and never had a problem with payment, talk to him about your concerns and, MAYBE give him the benefit of doubt. If you don't know him all that well, assume somethings up and demand payment on the work completed. simply tell him that you NEED "X" amount to continue, and no other explanation is necessary. and Talk to other subs, see if it's everyone or just you, but remember his subs maybe more loyal to the contractor than to you, so NO gossip.

Oh dear.

Willfescon,

Contracts, contrary to popular opinion, is NOT the be all and end all to your problem.

If the amount is less than $7,000 (in some states)you can still make a claim in small court. sometimes just the threat of legal action is enough to get paid. the judge will scold BOTH of you for not knowing better about haviong a signed agreement, but when that's done it will come down to the facts.

plenty of pictures, and paperwork, should get you paid plus time spent on court prep and show.

There is no need for a (written) contract, where both parties are honorable and everything is patently obvious. Indeed, I'm able to do a lot of my work on even less than a handshake.

Verbal discussions can be considered as a contract, but it gets a lot trickier determining who meant what.

The best written contract isn't worth the paper it's written on, if one of the parties is a scoundrel.

It's for that middle ground that we need pieces of paper. They help define the scope of the job, the amount to be paid, and all the other niggling details that come along. This is especially important where there are multiple parties involved, or there is a change in personnel.

You can if you deem it a safety hazard. I've done it on several occasions.

"First, u can't take down work you've put up. Once it's installed, it's no longer yours. Taking it down is illegal."

Same here, it can land you in jail, reason we get a large down payment and stay ahead of progress payments.