A subcontractor statement refers to the written contracts that subcontractors provide to their principal contractor. These statements apply to a specified period of subcontracted work.

As the principal contractor, you need to be careful about complying with the statutory requirements of these statements.

Subcontractors declare through their subcontractor statements that they have met their Worker’s Compensation, Payroll Tax, and Remuneration obligations.

If a principal contractor doesn’t receive a subcontractor statement, they might face liability for the subcontractor’s obligations even though they relate to employees of the subcontractor.

So, for example, a builder engages a subcontractor to build a pool as part of a new house. The builder should require the pool builder to complete a subcontractor statement otherwise the builder could be liable for the pool builder’s payroll tax, workers compensation and wages to the employees of the pool company.

Remember

• As a principal contractor, make sure you receive a trustworthy subcontractor’s statement.
• The principal contractor has an obligation to keep this statement for a minimum of 7 years after receiving it.
• Subcontractors should make sure that they have complied with their payment obligations, and statement obligations to ensure that they can receive payment.
• As always it is important to consult a lawyer if a dispute arises.

To download a copy of the Subcontractor’s Statement click here.

For more information on subcontractor statements speak to us today.