ACT Contractors Forms... From The Paper Side of Contracting.

Contractor Form: Construction Labor Lien Release Form

Posted by Bill Baird on Mon, Oct 19, 2009 @ 18:10 PM


     Whether you call it a construction labor lien Customer demanding a labor lien release form from construction contractorrelease, construction worker labor lien release, workers labor release, laborers lien waiver or simply a laborers release, more and more property owners are demanding they get labor releases from every worker on their project. No wonder this is becoming more "popular"... it seems like consumer advocates, in everything they write, tell property owners to protect themselves from having a labor lien placed against their property by using this form. General Contractors also find this form useful as a tool for checking up on their subcontractors to make sure the sub is paying their employees out of the progress payments they have received.

     The problem is that state laws from California to Florida DO NOT provide for a labor release form like they do for other, construction related lien release forms. Also... State labor commissioners are given broad power to collect wages due employees from SOMEONE. The prefered "pocket" to get these overdue wages is the actual employer of the worker on the construction project. If this is a subcontractor on the job, and their "pockets" are empty, the next pocket looked at will be the contractor whom the owing subcontractor has contracted with on the project. This contractor can be another subcontractor of a higher "tier" or level or it could be the Original or General Contractor on the project. If the wages cannot be paid at this level of the construction subcontractor "tier" then the next higher tier is looked at until the top "tier", which is the project property owner, is expected to pay the wages!

What does this "Problem" mean?

     The short answer is that you can NEVER rely on a labor release form to fully protect you from claims made by workers on your project like you can the other construction lien release forms used between your construction contracting company and other construction contracting companies working for you. You can, for example, pay a subcontractor for the job they agreed to do and demand a lien release from the subcontractors company. This release will protect you, in most cases, from a lien from this subcontractor. If, however, this same subcontractor took the money you paid them and "ran", failing to use this money to pay wages owed his workers on your project, you will most likely be expected to pay these wages even though you already "paid" the wages once through payments received and mis-appropriated by the subcontractor. Then it's up to you to get re-imbursed for these wages directly from the subcontractor who should have paid them in the first place. That just ain't right!


So what good is this labor release form then?

     Use this form to give comfort, but no real protection, to any property owner who "demands" it as a condition before paying you. That's a no-brainer. But the best use of this form is between your construction company and your subcontractors...

     Use the labor relese form to "check-up" on your Construction worker thumbs downsubs. Make sure the sub is actually using the money they receive on your project to pay wages owed to their workers on your job! How? By contacting random names on the labor release form and ASKING them if they have been paid. That is why it is important to get the workers phone number as well as their names, on any labor release form. And make sure the labor release form you use clearly tells any employee who signs it, that you are paying the subcontractor based on their signatures, and that the sub should be paying the workers out of these funds! Make sure your labor release form looks "official and professional" and not typed up so signers think before lying about receiving their wages.... like this construction worker labor lien release form.

     You say, what's the point? Workers will lie about getting paid to keep their jobs...right? I agree, for the first missed paycheck anyway. But someone will almost always speak up after they miss that second paycheck and are probably looking for a new job! The sooner you find out if a subcontractor is mis-appropriating funds, the smaller YOUR liability will be since you can put a stop to it sooner rather than later.

Have you had experience, good or bad, using a labor lien release? Questions about the usage of this form? Please share your comment so we can all benefit!

Topics: labor lien release, construction labor lien release, workers labor lien release, construction worker labor lien release

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