Hello every one, I have a question and this is totally new for me. I met a guy who is a VA just starting out and I want to sub some of my bookkeeping work to him. I wanted to know what kind of agreement do I need, and just how does it work…subcontracting. We meet on Monday, and I can really use some advise.

Thanks,

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Mary Harris

You need to have a written and signed sub-contract agreement before sending him any work. At the very least it needs to include:

- The nature of the relationship, if he is a 1099 sub-contractor the agreement needs to specifically state that he is a sub-contractor and responsible for his own taxes and insurance. Note: As a contractor you can not determine his working hours, only state deadlines for having work done and hours he is required to be available.

- General description of work to be performed and how the work will be provided to them

- Payment rate and terms

- Privacy clause

- Details of whether the sub is allowed to contact the client directly, how, when and why

- Non-compete agreement, this is a must, this gives you legal recourse if the sub steals your client, this needs to state that the client is yours and that even if the sub no longer works for you he may not accept work from the client directly for a stated period of time after working for you

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Rebecka Melson ~ Virtual Business Services

Great answer Rebecka (as always)!

I'd never even considered an NDA for VAs I'd subbed out to - but with the way you've worded it here it seems a non-negotiable.

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Rebecka thank you so much. I must say this is the first time I've heard of a Non-compete agreement. Where can I find one as a guide, and also how do I go about to determine the rate of pay for him? I am kinda nervous about this but I know VA's do this all the time. I got a call from a paralegal that wants to team with me. I am thinking how do I handle this.. Any and all help is welcomed. I need some guidance so I won't mess this up. Thanks a bunch!

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Mary Harris

Correction: I said "non-compete" before and I should have said "non-solicitation". A non-compete is similar but is for a different purpose.

Here is a sample of a non-solicitation clause:

"Non-Solicitation. The Sub-contractor acknowledges that he or she will acquire considerable knowledge about, and expertise in, certain areas of the Contractor’s business and that he or she will have knowledge of, and contact with, customers and suppliers of the Contractor and its Affiliates (as hereafter defined). The Sub-contractor further acknowledges that he or she may well be able to utilize such knowledge and expertise, following termination of his or her service with the Contractor, to the serious detriment of the Contractor in the event that the Sub-contractor should solicit business from customers of the Contractor or its affiliates. Accordingly, the Sub-contractor agrees that he or she will not, for a period of two (2) years after termination of his or her contract, directly or indirectly, approach any customer or business partner of the Contractor or its Affiliates for the purpose of providing services substantially similar to the services provided by the Contractor or its affiliates."

I would recommend going to docstoc.com and searching for a sub-contractor agreement. You will find many versions there, I would find one closest to your needs and then edit it for your use.

Also, I would make sure it has a confidentiality and non-disclosure clause (which I forgot to mention before). This basically states that all information provided to the sub is confidential and they are not allowed to share the information with any 3rd parties.

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Rebecka Melson ~ Virtual Business Services

Originally Posted by mharris

...also how do I go about to determine the rate of pay for him?...

I can't really help you here as I have yet to sub any work (except to family). Hopefully one of the VA's here who has a multi-va business can share how they determine their rates.

I was told once by a multi-va owner that their subs usually discounted their rates to them by 25%, but I think that figure would depend on how much the subs hourly rate was vs. your own.

I've done a couple of sub jobs for people that needed to offer a service to their client that they didn't provide and I charged my full rate. What markup, if any, they made on it I don't know.

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Rebecka Melson ~ Virtual Business Services

Fantastic Rebecka, this is an awesome help to me. Thank you so much.

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Mary Harris

Non compete is essential and please please pleaes specify in no uncertain terms the time period. Is it okay for them to contact your clients directly? My husband/my attorney drew up a GREAT agreement for me.. Send me an email if you would like a copy..happy to share.

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Tamika R. Johnson, MBA, Principal
administrative partners, llc
www.administrativepartners.net | http://adminpartners.blogspot.com

Thank you! I searched this thread for an hour for info on how subcontracting works and this is just what I was looking for. I haven't reached a point where I'd need to sub anything out yet, but if/when I do, I'm trying to figure out whether it would be better to sub work or just refer it to another VA, and what, exactly, the difference is. Some of the other threads gave good info but I was still confused on the HOW of it all. So thanks again for such a thorough explanation.

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~Jean B.
The Task Wrangler

My question regarding non-compete agreements is what is the standard time-frame?

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Nikki Johnson
The Millionaire's Assistant™