Employed by a large contractor with different LLCs in every state 1

mikek396 · Jun 17, 2023

I am a PE employed by a large specialty contractor (non-design firm) based in NY. The company has different LLCs in each state, so I am technically not employed by Contractor Florida LLC or Contractor Texas LLC, etc... Since the contractor is not licensed to provide professional services, I would be setting up my own PLLC to provide engineering services to the client. Obviously I cannot provide services to the NY company as they are my employer and I would therefore not be an independent engineer. However, as long as I am providing services to the other state LLCs, not the NY company that I am employed by, is this a legal/ethical arrangement?

I should also mention that industry standard is for the contractor to hire the engineer directly, most contractors have an engineer on retainer to review and stamp plans, give input where necessary. The standard for this particular industry is not for the end client to hire an engineer separately from the contractor.

dik · Jun 17, 2023

With LLCs, I suspect you are employed by the one that employed you, unless there is something else in place. For legal purposes, they would likely be independent businesses. You might want to confirm that with the company lawyer and/or your own (better solution) and determine the best way to deal with it. I suspect that if you have a Certificate of Authorisation (or equivalent) requirement, a separate C of A would be required for each named company.

-----*****-----
So strange to see the singularity approaching while the entire planet is rapidly turning into a hellscape. -John Coates

-Dik

StrucPatholgst · Jun 18, 2023

I would think you'd need to at least disclose that whole arrangement to the company's clients, even if it's with just an attached resume.

phamENG · Jun 18, 2023

Sounds like an expensive mess and headache for you. I imagine they have a parent company that holds all of the individual LLCs. I'd push to be employed by that company and to have that company form a design division with the requisite firm licenses and certificates of authority. That places the onus of compliance and liability where it belongs - with your employer.

As for your particular arrangement, that sounds murky enough that you should probably spend an hour or two going over it with your own attorney.

dik · Jun 18, 2023

It's not a disclosure thing, it's a legal thing. I don't think they would have an umbrella company that looks after them all. The reasons LLCs are used is to limit exposure and liability and to reduce taxes. They are usually separate entities and created for that reason.

-----*****-----
So strange to see the singularity approaching while the entire planet is rapidly turning into a hellscape. -John Coates

-Dik

CWB1 · Jun 19, 2023

I would challenge the legal dept to explain why this odd arrangement is necessary. Engineering is typically performed by one or more subsidiaries for the entire company, the only employees of the parent are typically the C-suite and their support staff.

As mentioned, if you're performing work after-hours for your employer then you'll need a legal disclaimer so customers understand that you are not an independent third-party regardless of which subsidiary signs the contract.

mikek396 · Jun 20, 2023

The issue is that the contractor is unable to get a COA since none of the partners are PEs. Since they cannot get a COA, we cannot offer engineering services, even if the industry standard is to do all the engineering in house and then have an outside PE review & stamp.

I'm basically trying to figure out if there's any arrangement that I can become the "outside" engineer, while still remaining employed by the contractor.

The ultimate goal here is to position myself so that MY new engineering firm can cover expenses, before I have any other clients, while my personal income remains the same or higher.

dik · Jun 20, 2023

Can you as an individual get a CofA? It may require insurance issues. I did a lot of work in my earlier years without a CofA or insurance, including Arcitectural stuff (wasn't a requirement, back then) including 20 storey buildings. I simply had to advise the client that I had no insurance.

-----*****-----
So strange to see the singularity approaching while the entire planet is rapidly turning into a hellscape. -John Coates

-Dik

mikek396 · Jun 20, 2023

I probably could get a COA as an individual, but would prefer the liability protection of a PLLC. Definitely not willing to risk operating without any insurance

Can't believe some people do that...it would scare the shit out of me

dik · Jun 20, 2023

Can you get one with the LLC company holding you harmless? You need to talk to a lawyer, soon. Then you can do work for all of them...

-----*****-----
So strange to see the singularity approaching while the entire planet is rapidly turning into a hellscape. -John Coates

-Dik

SWComposites · Jun 20, 2023

So basically this seems like the company’s problem, not yours. Did this issue just come up now? What have they done in the past?

If you set up PLLC’s in other states to basically help your company, I would insist your company pay 100% of your insurance costs.

WinelandV · Jun 20, 2023

Seems like the really simple solution is to make you a partner - then the company can get the COA's.

Please note that is a "v" (as in Violin) not a "y".

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