Florida Statutes 713.01(28) defines a subcontractor as a person who is not a materialman or laborer and who enters into an agreement with a contractor to perform contractual obligations. A subcontractor is not to be confused with a sub-subcontractor, which, according to Florida Statutes 713.01(29), is someone other than a materialman or laboror who enters into an agreement with a subcontractor for the performance of the subcontractor’s contract.
Construction Contract Prompt Payment Law
Florida Statutes 715.12 is known as the Construction Contract Prompt Payment Law, which applies only to written contracts to improve real property. A construction lien must also be authorized under part I of Chapter 713.
If a subcontractor-obligor has subcontractor-obligees to help him with jobs, the subcontractor must pay under the terms specified in his contract with his subcontractor. In the chain of contracts, when the obligor has been paid by his contractor or subcontractor, payment is due to the subcontractor obligee immediately, according to Florida Statutes 715.12(4)(b), as long as the obligee provided the obligor with all affidavits and waivers required for proper payments.
Application of Money to Material Account
Florida Statutes 713.14(1) states that any subcontractor must designate the contract under which the payment is made. The subcontractor may also designate the items of account to which payment should be applied. If the subcontractor makes a false designation, she is liable to anyone who suffers a loss as a consequence of the false designation for the entire amount of the loss.
According to section (2), if the subcontractor owes a materialman or other subcontractor, the materialman or sub-subcontractor — or the subcontractor in relation to its contractor — must demand the payer make a designation of the account and the items of the account for which that payment is for. If there is a lien claimed for materials that a subcontractor provides, the subcontractor must prove that payment was made for the materials.
Liability for Compensation
Each subcontractor that engages in public or private construction must provide compensation for his W2 employees, according to Florida Statutes 440.10(1)(a) and 440.38. A subcontractor must provide evidence of the workers’ compensation insurance to the contractor. If the subcontractor is a corporation and the corporation has an officer who elects to be exempt, the subcontractor must provide a copy of the certificate of exemption.
Security for Compensation: Self-Insurers
Florida Statutes 440.38 states that every subcontractor-employer must secure payment of worker’s compensation by insuring and keeping the payment insured. It must also provide proof to the Florida Self-Insurers Guaranty Association that it has the financial ability to pay — on time — current and future claims.