At the end of the day, your employees leave behind evidence of their hard work. You’re proud of their accomplishments. You’re also alarmed at the mess such production can create, even if it’s only waste paper and lunch room garbage. You’re much too busy to clean it up yourself and you can hardly expect your employees to take out the trash. It’s time to hire a janitorial service.
While many commercial janitorial firms specialize in housekeeping and sanitation, a number of companies offer the whole palette of cleaning services: interior cleaning, floor stripping and waxing, windows inside and out, construction site cleanup, restaurant cleaning, pressure-washing for warehouse floors, furniture care, health care sanitizing, HVAC maintenance, houseplant care, trash removal and more.
Most commercial firms also offer one-time services for such needs as fire, smoke or water damage restoration, or move-in/move out cleaning. Some can also stock your shelves with cleaning supplies and paper products.
When you’re ready to start shopping for janitorial service, look for a firm that will design a cleaning program and schedule to meet your needs. There are scores of janitorial firms competing for business, so you have the luxury of taking in proposals and choosing the one that offers the best package at the most reasonable cost. It is advised, however, that you narrow down your search to between 3 and 5 suitors.
QUESTIONS TO ASK WHEN BUYING
• How long has the janitorial company been in business?.
• What is their service territory?
• Do they offer both day and night service? 24/7 availability? Emergency service?
• Are they licensed, bonded and insured? Will they provide a copy of their insurance certificate?
• Do they use their own employees to do the work?
• Can they provide a client list and references?
• What kind of guarantee do they offer?
• Can they give you an estimate over the phone?
• Are their on-site estimates free?
• Do they estimate based on square footage?
• Do they estimate on tasks completed?
• What kind of term contracts do they offer?
• Do they offer packages with special rates?
• How large is their work force? Will a dedicated janitorial person or team be assigned to your company?
• How are their personnel screened and selected? Do they receive training?
• Do they offer hands-on supervision on large projects? How about regularly scheduled inspections of the work performed?
• What kind of billing schedule do they follow?
QUESTIONS TO ASK WHEN CHECKING REFERENCES
• How does the janitorial company respond to complaints?
• Do you find you have the same problems with the janitorial company?
• Have you ever had to call them for emergency service?
• Can you reach them after hours?
• How do they handle breakage and theft?
FACTORS THAT IMPACT COST
• Some commercial janitorial firms offer services beyond the usual cleanup and floor care. If you’re also in the market for dust control for your “sealed-room” lab, maintenance for your landscaped grounds, or even copy/mail services, look for a firm that also offers such services. You’ll save money on a package deal.
• If they offer supply products, get a proposal. Most firms look at overall profitability and buying supplies will keep down your service cost overall. You will also save time and money on ordering and stocking since most firms will do this for you.
• If you’re willing to sign an annual contract, you’ll likely get a discounted rate. Make sure there’s a termination clause so you can opt out if you’re dissatisfied with the quality of the work. More and more firms are starting to eliminate annual contracts and going month to month. Unless your facility is large do not be surprised if they do not offer this option.
• If you’re facility is small, you may want to talk to your neighbor to see if you can negotiate a deal together with a janitorial firm.
BUYER BEWARE
• Because some clients have several locations, some janitorial companies use subcontractors to fulfill their agreements. Subcontracting work is fine for large corporations such as banks, but for a small business such as yours, you want to have a one-to-one relationship with the people providing service to you. Keep this in mind also if you are negotiating with a broker.
• Make sure that any sub-contractors used are an actual company that does janitorial services and not a “mom & pop” type outfit. Some state laws do not consider individual persons that are paid on a 1099 form as a legal sub-contractor. This means you could end up being responsible for income taxes not withheld for these individuals. (See “How the IRS determines worker status” in this article.) It also means they probably do not have workers compensation insurance.
• Most janitorial companies refuse “no-key” accounts, with good reason. Arriving at a job site to find no one there is frustrating for the cleaner and can be costly for you. If you feel you can’t trust a janitorial company with a set of keys, get a referral from another business owner so you can use a company you trust. Further incentive: no-key accounts will cost you more in basic services.
• Fidelity bonds are only good upon an arrest and conviction, so make sure the janitorial firm has liability insurance. Always request a certificate of insurance and in some situations, you may want to be listed as “additionally insured” on the janitorial firms insurance.
HOW THE IRS DETERMINES WORKER STATUS
The IRS uses three determining factors for clarifying whether a worker qualifies as an employee or an independent contractor:
Behavioral control: Things like instructions that the company provides the worker such as when, where and how to work, does the company control the results and provide training? Independent contractors ordinarily use their own methods.
Financial control: Independent contractors are more likely to have unreimbursed expenses. Does the worker have an invested interest? Independent contractors ordinarily have a financial investment. Does the worker make other services available relevant to the market or is he just a janitor? Does overtime get paid for additional hours worked or is he paid a flat rate?
Type of relationship: Independent contractors are more likely to have contracts, terms for length of job, no benefits and do work for other companies of a relevant nature. If all of the workers jobs are provided by one janitorial firm, he is an employee not a independent contractor.
GOOD SERVICE DOESN’T JUST HAPPEN:
A good way to protect your self from companies that use illegal subcontractors is to do some simple math. If the janitorial service does not already provide in their proposal the amount of hours spent cleaning your facility, ask them. Now take this information and divide it into the lump sum they have provided in their proposal and see if it adds up. Operating a dependable service business requires organization, competent management and a substantial capital investment. So don’t judge service charges solely by the time spent cleaning your facility. When a professional janitorial service goes to work in your facility, many costs have been incurred just to get him there ready to do the job. Here are some of them:
• Special tools and equipment
• Chemicals
• Training
• Sales and Estimators
• Stock of supplies
• Transportation
• Supervision and Management
• Wages and Overtime
• Equipment maintenance
• Vehicle fuel and maintenance
• Stationery and supplies
• Bookkeeping
• Office rent and Utilities
• Insurance
• Holiday pay
• Taxes
GLOSSARY OF TERMS
Bid/Proposal: A written presentation submitted with the goal of securing an account, outlining the work to be performed, the cost, the time it will take and other details to support the investment.
Bonded: Having a fidelity bond that covers each employee, to protect a company against loss or damage due to dishonest acts.
Certificate of insurance: Proof of liability, workers compensation and bond insurance mailed to you directly from the insurance provider.
HVAC: The combined heating, ventilation, and air conditioning systems in a building.
Janitorial Broker: Service that secures and sells janitorial accounts, basically serving as an agent matching customer to janitorial company.
Job Walk/Walk Through: Appointment with janitorial firm to walk and view facility for proposal or inspection.
RFP: Request for proposal.
Specs./Specifications: Tasks to be performed by janitorial firm. Job Walk/Walk Through: Appointment with janitorial firm to walk and view facility for proposal or inspection. RFP: Request for proposal. Specs./Specifications: Tasks to be performed by janitorial firm. Subcontractor: An individual or company hired by a larger company or contractor to perform services for the larger entity’s clients. Time Standards: Industry accepted times to perform certain tasks in the janitorial field. An individual or company hired by a larger company or contractor to perform services for the larger entity’s clients. Time Standards: Industry accepted times to perform certain tasks in the janitorial field.
Little-Noticed ‘Brother’s Keeper’ Law Requires California Businesses to Police Contractors’ Labor Law Compliance
January 26, 2004
– By Richard A. Leasia
Labor and Employment Department,
Thelen Reid & Priest, LLP
On October 12, 2003, four days after his defeat in California’s recall election, Gov. Gray Davis signed Senate Bill 179 into law. While almost unnoticed by the media, the new statute is noteworthy. It effectively requires developers and other users of contractors to carefully monitor the contractors’ compliance with laws regulating the labor and services provided.
Users that fail to do so can be held liable for significant damages if it is shown that they “knew or should have known” that the contract price was insufficient to enable their contractors to comply with applicable laws. SB 179 thus truly makes those hiring contractors and subcontractors to provide construction, farm labor, garment, janitorial or security guard services their “brother’s keeper” for the duration of the contract. Users will ignore this new and unexpected obligation at their peril.
SB 179 threatens – as it clearly was designed to — the historic legal separation between principal and independent contractor, no matter how legitimate and independent the relationship is, by creating a new theory of vicarious liability. The statute likewise threatens the ability of developers and contractors to accept and rely on low bids. And, although SB 179 is applicable to several industries, its greatest impact may be felt in construction and development.
SB 179 was one of many bills impacting California employers rushed through the Legislature and signed by a beleaguered Gov. Davis in the weeks leading up to and immediately after his defeat in the recall election. Although Gov. Davis vetoed identical legislation in 2002, no real explanation for his reversal of position was offered.
The Scope of the Statute
Beginning January 1, 2004, SB 179 requires developers and other users of construction contractors to police the labor and employment law compliance of their contractors.
The statute does so by making it unlawful to enter into a contract with a construction contractor or subcontractor “knowing” that the contractor or subcontractor is not being paid enough to comply with all “applicable” state, federal and local “laws or regulations governing the labor or services to be provided.” SB 179 will impute such knowledge to any “entity” or “person” who “should have known” that it had provided insufficient funding. Those violating the statute are subject to claims for damages and possibly even demands that they rectify the labor law violations of their contractors and subcontractors. The basic obligation created by the statute is startling in its scope and simplicity: A person or entity may not enter into a contract or agreement for labor or services with a construction, farm labor, garment, janitorial, or security guard contractor, where the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided.
For purposes of the statute, the term “knows” includes – but is not necessarily limited to – “knowledge, arising from familiarity with the normal facts and circumstances of the business activity engaged in, that the contract or agreement does not include funds sufficient to allow the contractor to comply with applicable laws.”
“Should know” includes – but may not be limited to – “knowledge of any additional facts or information that would make a reasonably prudent person undertake to inquire whether, taken together, the contract or agreement contains sufficient funds to allow the contractor to comply with applicable laws.” Moreover, the statute provides that “failure… to request or obtain any information from the contractor that is required by any applicable statute or by the contract or agreement between them, constitutes knowledge of that information for purposes of this section.”
Thus, a developer or contractor will be deemed to have violated the statute if it “should have” realized, based on its own knowledge and experience, that it was not paying its contractor or subcontractor enough to comply with the myriad labor, employment, and other laws and regulations applicable to project employees or to performance of contractual services. And, the developer or contractor will be conclusively deemed to possess all information that “any applicable statute” or its own contract required it to obtain, whether it actually obtained the information or not.
Subject to two exceptions, SB 179’s obligations are applicable to all construction contracts “for labor or services,” regardless of whether they are public or private and regardless of the size of the contract. A ” ‘construction, farm labor, garment, janitorial, or security guard contractor’ includes any person… whether or not licensed, who is acting in the capacity of a construction, farm labor, garment, janitorial, or security guard contractor.”
Neither “person” nor “entity” is defined by the statute, but it appears that the drafters sought the broadest possible coverage.” “Entity” could apply to public entities in addition to private corporations, general partnerships, limited liability companies and partnerships, and sole proprietorships.
By its terms, SB 179 is not limited to developers. Thus – depending upon how the statute ultimately is interpreted — general contractors may be liable for noncompliance by their subcontractors if it can be shown that they knew “or should have known” that their subcontracts were insufficiently generous to adequately fund the subcontractors. Similarly, subcontractors could be liable for their thirdtier sub-subcontractors.
Such interpretations may be inconsistent with the claimed purpose of the statute. What interpretation the courts adopt remains to be seen, but litigants surely will argue for a broad interpretation under which the statute’s obligation is imposed on contractors and subcontractors as well as on their developer customers.
What laws are “applicable” to a project also is an open issue. Besides wage-andhour laws, the list could include safety, benefit, civil rights and workplace conduct laws. Plaintiffs may seek to expand the reach of SB 179 by claiming that building codes and environmental laws also are applicable.
THE LIMITED EXCEPTIONS
SB 179 was sponsored by labor organizations — which are identified as its “source” in Senate and Assembly committee reports — and was supported by the State Building Trades Council.
As befits its origins, one of SB 179’s two exceptions to coverage applies to union contractors: “a person or entity who executes a collective bargaining agreement covering the workers employed under the contract or agreement.” The statute also contains a limited exemption for homeowners who enter into construction contracts for their homes, “provided that a family member resides in the residence or residences for which the labor or services are to be performed for at least a part of the year.”
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