Section 218.7 created significant potential liability for direct contractors if their
subcontractors failed to pay wages, fringe benefits or other benefits to laborers.
In some cases,
subcontractors have to wait months or even years to be paid in full for their work on public contracts, and that's a big problem for the companies, many of which are many small or disadvantaged businesses, according to the Minnesota
Subcontractors Association.
The Expert issued its report and highlighted that (a) the Project's works were suspended for several years due to the Employer's financial difficulties and its inability to continue funding the Project, (b) the Main Contractor did not engage a new MEP
subcontractor, (c) the outstanding payment owed to the
Subcontractor amounts to AED 6,920,000, and (d) the Employer did not pay the Main Contractor the equivalent payment.
A prime contractor is responsible for managing its
subcontractors. That is an uncontroversial proposition any prime contractor would agree with, but there is little authority to clarify what exactly that management obligation entails.
Interestingly the courts have not been concerned with the definition or phrase "nominated
subcontractor" and have been more persuaded by the closeness of the relationship between the employer and
subcontractor.
One simple modification to the typical loss control incentive program is structured around a statistically driven bonus system that rewards
subcontractors participating in a project's workers' compensation wrap-up program for better-than-expected claim experience.
* Review the
subcontractor's written employee policies and training materials on maintaining confidentiality.
Even though, in the real practice,
subcontractor will often directly proceed to do the job before signing the actual contract but merely just a simple issue of 'letter of intent' by main contractor [11].
Think of this phase as an opportunity to work with a
subcontractor to build the foundation for a successful partnership.