When the Lowest Bid Comes at the Highest Cost: Unmasking Hidden Dangers in the Commercial Cleaning Industry

My name is Damon Cleveland, I own and operate ProCleanings in New York City, NY and Verdant Building Services, in Dallas TX. In recent years, I have seen many cleaning companies have embraced a race to the bottom, underbidding contracts to secure work at any cost. On the surface, it seems like a boon to the client: “I’m getting a great deal!” However, these rock-bottom bids are frequently predicated on questionable employment practices, off-the-books hiring, and under-the-table wages that skirt legal standards. This isn’t just a matter of unethical business practices; it has real-world implications for the quality of service, the safety of your workforce, and the longevity of your professional relationships. In short, when you opt for the cheapest bid, you may be inviting a range of hidden, costly problems into your workspace.

In this article, I will delve into the widespread issue of underbidding in the cleaning industry. I’ll examine how and why it happens, the hidden risks it poses, and how reputable companies are being affected by these unethical tactics. I’ll also provide guidance on how clients can protect themselves and encourage a more transparent, responsible marketplace. Along the way, I’ll bring in quotes from industry professionals and highlight some of the conversations happening in the commercial cleaning sector today.

The Rise of Underbidding in Commercial Cleaning

For decades, the commercial cleaning industry has struggled with price-based competition. As cleaning services are often seen as a commodity—mopping floors, emptying trash, wiping down desks—some clients believe that as long as a building appears clean at the end of the day, it doesn’t matter who does it or how.

However, a shift toward underbidding has accelerated in recent years due to several factors. First, the pressure on building managers to cut costs has never been greater. Rising rents, increased insurance premiums, and other operational expenses have encouraged facility managers to look for savings in every line item, including their janitorial contracts.

At the same time, new entrants flood the market, many with little industry experience or a disregard for best practices. They may not be bound by the same ethical codes or professional

associations, and they might rely on tactics that reputable, established firms wouldn’t consider. For a legitimate cleaning company that follows the rules—paying fair wages, providing benefits, complying with labor laws—indeed, competing against these artificially low bids can be an overwhelming challenge.

Why Do Some Cleaning Companies Underbid?

• Cutting Corners on Labor Costs: The number one expense in the cleaning industry is labor. To drastically reduce their overhead, an unscrupulous cleaning company might hire workers off the books, pay in cash under the table, or even use undocumented labor. By skirting tax laws, workers’ compensation insurance, and minimum wage requirements, they can propose rates that seem implausibly low to any ethical competitor.
•  Foregoing Proper Training and Equipment: Another way to drive down costs is to skip employee training sessions, safety workshops, and investments in high-quality equipment and cleaning supplies. While this may temporarily reduce expenses, it compromises the quality of the service delivered and, ultimately, the health and safety of everyone who works or visits the premises.
• High Turnover and Low Accountability: Unethically run cleaning companies may rely on a revolving door of employees who are poorly paid and have little incentive to uphold quality standards. A transient workforce makes it harder to enforce consistent cleaning protocols, address issues proactively, or maintain a stable customer service relationship.

The Hidden Dangers of Under-the-Table Labor

When companies operate in the shadows, ignoring labor laws and employing unvetted personnel, they introduce a host of potential risks:

1. Legal Liabilities for the Client: If a cleaning contractor is found to be engaging in illegal employment practices, the client can be caught in the crossfire. Lawsuits, investigations, and fines may follow if the building owner or manager knowingly (or even unknowingly) hired a non-compliant cleaning company.

2. Inadequate Insurance and Liability Coverage: Under-the-table employment often goes hand-in-hand with insufficient insurance. If an undocumented worker is injured on-site or causes damage, the client might be left unprotected. Without proper insurance, claims can fall back on the property manager or building owner.

3. Uncertain Reliability and Security: When background checks, training, and proper documentation are not priorities, the resulting workforce may be unstable or even unsafe. Cleaning staff typically access numerous areas within a building—offices, storage rooms, sensitive files, or even secure labs. Without trustworthy, well-screened employees, clients are left with serious security risks.

4. Poor Quality of Work and Hygiene Standards: Cutting costs on labor tends to correlate with cutting corners in work quality. Dirty equipment, watered-down cleaning chemicals, and rushed cleaning protocols can lead to poor results. In environments like medical clinics, schools, or restaurants, subpar cleanliness can pose health hazards.

The Client’s Risk: More Than Just Dirt and Dust

The ramifications of hiring a dubious cleaning company extend beyond dusty corners or streaky windows. Consider the following scenarios:

• Reputational Damage: If word gets out that a building’s cleaning service employs illegal labor or violates labor laws, it tarnishes the reputation of everyone associated with the facility. “In today’s world, transparency matters,” says Mary Lopez, Facilities Manager at NorthPoint Office Suites. “If tenants or visitors lose faith in our commitment to doing business ethically, it erodes trust and could impact our ability to attract and retain clients.”

• Operational Interruptions: Imagine an immigration or labor compliance raid occurring during business hours. Such an event could disrupt operations, upset tenants, and lead to unplanned downtime. It’s not just about cleaning; it’s about ensuring a professional environment that supports your business activities.

• Increased Costs in the Long Run: While the initial low bid might seem like a cost-saving measure, hidden costs often emerge over time: the need to re-clean areas, replace damaged property, or even settle legal claims. In the end, the “cheapest” option may become the most expensive in terms of time, money, and peace of mind.

Voices from the Industry: What Others Are Experiencing

Numerous reputable cleaning companies and industry leaders have spoken out about the growing trend of underbidding. Many say it’s threatening to undermine the sector’s integrity and drive quality-focused businesses to the brink.

“We’ve lost contracts to companies bidding 30% to 40% lower than what’s economically viable if you follow all the rules,” says Mark Thompson, Director of Operations at BrightClean Janitorial Solutions. “I don’t know how they can do it legally. Either they’re skipping out on taxes, paying people under the table, or cutting corners on safety—and none of that is good for the client or the industry.”

Similarly, a spokesperson from the International Sanitary Supply Association (ISSA), a leading trade organization for the cleaning industry, commented in a recent webinar, “We encourage clients to ask questions: Are the workers properly vetted? Are wages and taxes paid in accordance with the law? The cleaning sector’s image suffers when rogue players exploit the system.”

Janet Collins, CEO of ShiningStar Cleaning, notes, “We work hard to pay our team fairly, train them thoroughly, and provide quality service. But we often face clients who say, ‘Company X can do it for half your price.’ It’s disheartening because we know what that implies. We’re not just competing on price; we’re competing against a business model that ignores basic ethical standards.”