What is a labor broker and how do they work?

FAQ#: 450 published 12-13-2021

Labor brokers in most cases are individuals that have any number of laborers available to them to start or jump into a project.

Most all laborers working under a labor broker are classified independent contractors (G-1099).

Unskilled often poorly trained labor is what you will see most often especially in the southern states.

Language barriers often haunt project owners when reviews of work are conducted.

Most all labor brokers are legitimate with proper license and insurance. But because they practice a labor pool approach the labor broker will often not have first hand knowledge of the workers skill set and ability to complete the job as you expect.

Labor brokers do not hire workers, their is no contract for work between the labor broker and the worker. The contract is between the labor broker and the customer who has no say so in who actually works on the property and project even when in most cases the project owner is legally responsible for the project.

Best practice is to find a company that has hired W-2 classified workers and has ongoing training. It is also important that you have the ability to communicate with workers about your project. You can ask that all work related discussions are to be conducted in a language you as the customer understand. It will be the responsibility of the labor broker to interpret and translate when necessary. You do not have to just accept the work as is, you have the right to refuse final payment if the labor provided was not skilled in the tasks required for your project and the labor broker sent them directly or indirectly via third parties and other labor pools.

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