Construction Contract Cost Plus Withholding In Sacramento
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FAQ
In general, construction labor is not taxable. Installation labor of a fixture in most cases is also exempt from taxation, but the fabrication labor involved in the creation of a fixture is taxable.
A hirer or general contractor can only be held liable for injuries to a subcontractor at a job site under certain circumstances. Independent contractors are presumed as experts in their line of work, and they therefore often have the responsibility to take appropriate safety measures on the site.
On public jobs, California law caps retainage at 5% prior to completion and acceptance of the project. After 95% of the work is complete, withheld funds may be reduced to at least 125% of the estimated value of the unfinished work.
Any unlicensed contractor that is found working without a license will have to appear in a court of law and face misdemeanor charges that can carry a sentence of up to six months jail time, and/or a fine of up to $5,000.
Protect Yourself when Working with Custom Home Builders Only work with a licensed contractor. Get the contract in writing. Avoid “lump sum” bids. Talk to several contractors. Tie payments to deliverables. Get proof of payment to suppliers.
