Can a company take money from a sub-contractor's ...

They can certainly send the contractor a letter, stating what they owe him for the work done and what he owes them and they can  state that they are issuing a check for the difference.  This notification  will work best if outlined in the

Hi Jgoude:

Shemesh is on tract.  Unfortunately too many sub-contractors still deal on a verbal agreement rather than a signed hard copy.  Without it, a problem can become "he said;" even with companies a sub-contractor has frequent dealings with.   

When situations arise where back-charges go unpaid, yes, as a contractor myself, I would take out the balance owed the company, letting the sub-contractor know before cutting the check.

Some contractors go one step further - holding all current funds owed for work done until the backlog amount is paid in full.  This is especially true where some sub-contractors try to use a contractor as a banker or are chronic late pays.

The easiest way to keep a customer if the situation arises: is keep communications open, even suggesting outstanding balances be taken out on your next check.  This buys a little time to better control your receivables and expenses.

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