I hope not because you could be wrong!

When you get valid work release forms, everything is great. But what about work release forms that are null and void?

When your subcontractor gives you a waiver/release form from your Supplier, the Supplier still has lien rights to the project if the waiver/release is invalid (one way this happens is when the Sub falsifies the release).

DC has to pay Provider a second time because the onus is on DC to determine if the release was legitimate or not.

So do work release forms work the same way?

If the Sub gives DC a fraudulent work release form, does the employee lose out? That is equivalent to the Provider losing because the Sub didn’t pay them either.

Do you have work release forms on file from your clients, release forms that are not legally binding?

This list is not exhaustive…

A subcontractor:

* Pay your employees for fewer hours than they worked

* He pays the employee correctly on his paycheck, but then takes him to the bank and makes him cash his check and return part of his pay to his boss.

* You do not pay the prevailing wage to employees on a public works project, but state in documentation that you did

* You pay your employees the proper prevailing wage, but do not record all the hours your employees were on the job and therefore pay them less. Many Superintendents do not keep good records, so when the Sub submits their payroll report, the Superintendent copies the information the Sub wrote on their report.

* You pay your employees their regular time in a paycheck, but their overtime in cash, but sometimes those cash overtime is paid at regular time rates

In all of the above cases, the work release form could be null and void.

Do you think the employee should “eat it” since he signed the form?

No. Employees are protected. In at least some states, the labor code says that if an employee signs a work release form even though they have not been paid properly, then the form is null and void.

Why might the employee sign if he was not paid properly? For fear of losing his job.

He knows that there are more than 5 people waiting to fill his position in case he gets fired, so he signs the form to keep his job. Even if the boss doesn’t explicitly state that the employee will lose his job if he doesn’t sign, the stake is there.

So what can a contractor do to protect themselves?

One method would be to call your client’s employees and ask if they were paid correctly. But is that legal or realistic?

The BEST thing to do is go to an employment lawyer and find out how to handle these situations BEFORE you get caught up in this nightmare.

What could happen to the contractor if he accepts an invalid release, even if he doesn’t know it’s invalid?

If the employee is not paid, they will seize the Owner’s property (some states allow it) and file a complaint with the labor board, and the law in some states says that you are next to pay those wages. And the law in some states will lien YOUR property until those wages are paid!

Even if you do not agree to pay those wages, if you do not, as soon as the lien is filed on the property, you will likely be in immediate breach of your contract with Owner.

Is there a clause in your lease that states that you will keep the property free of bonds?

Now you have to worry about your client suing YOU!

Sure it’s not fair to have to pay those salaries (again!), but what other option is there if that clause is in your contract? Or if the state says you’re next in line and responsible?