When can a contracter use a subcontracter’s retainer for their work fees?

UPDATED: Jan 18, 2011

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When can a contracter use a subcontracter’s retainer for their work fees?

I take care of my husbands work forms. He worked as a subcontractor in 01/10 – 03/10. We have not received his retainer back.I called the company to ask about it and I was told that it was used to pay for fees. I have asked for an itemized statement for what it was used for. I am just curious whether or not a company is allowed to do that?

Asked on January 18, 2011 under Employment Labor Law, Texas


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

No absolutely not.  Payments do not flow up, they flow down.  Your husband should have been paid by now and not have the contractor keep anything. If anything, the contractor takes the hit, not the subcontractor.  There are always exceptions to this rule but you need to review the contract with your husband.  Is the contract between the contractor, your husband as sub and the property owner or are there two actual separate contracts?  Seems like if your husband did not get paid, he may have an actual proper claim for a mechanic's lien unless the contracts do not flow in that manner.  So if they don't, he can still sue the contractor or if he has an arbitration or mediation provision, go through arbitration or mediation.

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