employees vs independent contractor

Status
Not open for further replies.
lmao now don't get all excited on me..you must remember you are definitely treading on an area that is not common ground for neither employee or employer..so you might have a plan that works really well for you and the type of work you do..Yet I am not driven by cash otherwise I would of left this company years ago..I don't have medical benefits, I hope we get our retirement back this year..which is in the pipe line we agreed to allow the employer to step back couple yrs ago during a financial crisis to help bring the company back to a positive cash flow..now your plan is based on cash which is fine but yet I believe people are not always looking for the most cash..I believe there is another element to employment and if you are a good boss you can pull it off..I have a question though what is your business goal??what will your business look like years from now??will your business even be around 40yrs from now??these equal security and an employee really wants security more than money..I don't want to negate the money issue but I believe employees want to feel like they are needed no manipulated..just my observation..I open the questions to all business owners..Like posting here is for individuals anyway..everyone who visits participates in one thread or another..for what ever reason..emahler I have no animosity either just observations and questions..I hope you guys have a good day my has started out nice..only 3 below zero and sun coming up it is suppose to be 20 degrees today like a heat wave..I pick my grand boys up today at 3pm all 5 of them and we are going to hang out this weekend..happy camper:grin: :D
 
:D

no animosity or excitement intended....

there are always several ways to look at a situation...i firmly believe that hourly rates are bad for the industry...they promote mediocrity and lower the bar to the least common denominator.

now frustration...that there is plenty of...we are an industry full of people who will deride something just because they don't understand it...most of the arguments against anything in this industry go something like this:

'I know a guy, who knows a guy who tried that, and it didn't work. So obviously it's no good.'

we are 20 yrs behind the plumbers and HVAC guys in terms of thinking...we need all you old timers to hurry up and die and stop polluting the minds of the industries young...:D

Edit to add- have fun with your grandkids...i'm taking a snow day to go play in the snow with my son...at the end of the day, that's what it's about for all of us...i personally want all my employees to make as much as they can as quick as they can, so they can spend time living their lives....
 
charlie tuna said:
considering the electrical trade -- there are too many negative issues facing the electrical contractor. now, a drywall contractor is different. the guy hangs 100 boards and you pay him, not too much guesswork there. easy to track and his work is in place. electrically, it's more of a task to track "who did what" than it would be to properly supervise the installation.

we all have our ideas on what constitutes a day's work and we also know that there are days that things happen which increase and also decrease a job's productivity! and some of these things are totally out of our control. consider the problem when you have a crew of men that run out of a certain material because of a backorder or can't work in a certain area because of a job condition. it gets like a tug-a-war!

a qualified happy crew is the most productive method from my viewpoint. provide a qualified man the layout and material with good working conditions and he should produce to maintain his job security !! there's something about self pride that enters into this formula. take a good worker and limit his output somehow and he will quickly become none productive. my men always had an attitude that they were the best and could out do any other contractor and i guess that comes from self pride. and we could always take any job and make decent money on it...

when i hear contractors talking about piecework, it tells me that contractor doesn't know how to supervise and keep his men happy --- a happy man is a productive man...........
Click to expand...


You sound like the kind of guy I'd like to work for. Are Florida licenses reciprocal with Minnesota
 
All good points, but consider this:

emahler said:
...
what's wrong with paying an employee a set price for a project?
Click to expand...

If you pay a set price for a project, that's not an employee. That's a contractor.

you have a mechanic and a helper on a small remodel (say 5 days)...they do the entire project from start to finish...what's wrong with paying them a set amount of labor for the week? If they finish in 4 days, they get the same as if they finish in 5 days?
Click to expand...

What if they finish in 6 days, or 7 days due to circumstances beyond their control, or issues you overlooked or didn't consider when determining the manhours?

as a contractor, when you quote that project, you have a labor cost built into the project..(at least you should, but i'm beginning to wonder if most of you don't just guess at your pricing)...so, you have a labor budget...paying hourly, I win if the guys finish in less than 40 hrs...i lose if they take more than 40 hrs...

what's wrong with paying them the entire labor budget no matter how long it takes them?

puts everyone on the same team...we all win...
Click to expand...

Not really. It absolves and insulates you from bidding errors. It lessens your risk and transfers that risk onto the pieceworkers.

hourly rate, in it's very essence, puts contractors and employees at odds if the project has a fixed price.
Click to expand...

And if piecework were to become commonplace, It would eventually manifest itself into the same at-odds relationship.
 
emahler said:
...

Paying a fixed labor rate, actually gives the employee incentive to think about the project and look for ways to be productive...coupled with a GOOD boss, who really cares about his employees well being, this project will almost always get done in less than the alloted time...but again, in a properly executed system, it puts the employer and employee on the same team...
Click to expand...

Assuming a project has a static start and finish. Often, a project cannot be finished any sooner no matter how productive the employee is. If you projected 80 hours labor for a 1 man, 2-week project, the pieceworker cannot finish in one week.

Again, piecework can work on typical, assembly-line type projects, like residential. There's very little extenuating circumstances to consider.

How would you pay a piecework crew on a commercial project when part of the contract requires an certian number of electricians present during working hours to address issues like moving temp light? It's friday and they all worked their butts off to make a 3-day weekend.
 
Did this thread drift?

Did this thread drift?

The OP seemed to describe what I would call a 1099 contract employee situation. That is an oxymoron as you cannot be a 1099 employee. Contractors get 1099 forms, employees get W-2's.

We were slow a few weeks ago so two of my men went to work on a new Wally World being built nearby. They were hired as 1099 employees. If they worked 40 hrs for $10/hr their check was $400.00.

This is both illegal, immoral and unethical.

To make money as under the 1099 arrangement you have to:
1. Have control of your own work schedule. Cannot be required to be on the job at a specific time by someone else.
2. Provide your own liability insurance.
3. etc, etc....Actually the IRS has a lengthy list that must be complied with to be a legitamate 1099 employee.

To me, the worse aspect is the lack of protection for the working man. If he agrees to the 1099 arrangement, he forfeits:
1. Unemployment compensation
2. Workmens compensation
These are not trivial matters.

And the big irritation for this whole subject is that a legitimate contractor has big trouble competing with the scofflaws who could care less.
 
thinfool said:
The OP seemed to describe what I would call a 1099 contract employee situation. That is an oxymoron as you cannot be a 1099 employee. Contractors get 1099 forms, employees get W-2's.

We were slow a few weeks ago so two of my men went to work on a new Wally World being built nearby. They were hired as 1099 employees. If they worked 40 hrs for $10/hr their check was $400.00.

This is both illegal, immoral and unethical.

To make money as under the 1099 arrangement you have to:
1. Have control of your own work schedule. Cannot be required to be on the job at a specific time by someone else.
2. Provide your own liability insurance.
3. etc, etc....Actually the IRS has a lengthy list that must be complied with to be a legitamate 1099 employee.

To me, the worse aspect is the lack of protection for the working man. If he agrees to the 1099 arrangement, he forfeits:
1. Unemployment compensation
2. Workmens compensation
These are not trivial matters.

And the big irritation for this whole subject is that a legitimate contractor has big trouble competing with the scofflaws who could care less.
Click to expand...

Thank you for reinforcing my post from the other day;
You better check with your state Dept of Labor and Industry or whatever department oversees laws governing this. Here in Pa you cannot pay an employee by piecework only. You can pay them minimum wage with an incentive program but their entire gross wages get counted for unemployment taxes, workers comp etc. Although you may increase your productivity your financial liability will still be there.

Sub contracting is another area where you should be careful. Besides the state requirements which are sometimes more restrictive, the IRS has guidelines that will determine whether they are a legitimate sub contractor. It used to be that they had a list with about 14 or 15 qualifiers and you had to meet, I believe 7 of them to qualify. These included but were not limited to, Business checking acct, tax ID no, liability insurance, their own truck and tools, no direct supervision, their ability to come and go as they saw fit on the jobsite etc.

This has always been a pet peeve of mine. While trying to comply with all of the requirements, the workers comp, unemployment, FICA etc. competing with somebody paying their guys as subs and putting me at somewhere around a 25% labor disadvantage when bidding those jobs.
Click to expand...

Also a pet peeve of mine. This method would do more to hurt the working conditions than just about anything I can think of. A good portion of our workforce would be heading back to the days of sunrise to sunset work days while living in company housing and buying from the company store. Almost a hundred years of improving the working conditions in this country would be down the drain. I find that most of the other shops / companies that employ tactics such as these are just looking for that little bit of a competitive edge on their competition. It's the easy way out for them rather than trying to improve their own bidding and sales techniques.

If this would become the norm, the next thing could very well be a certain segment of "our" society would be clamoring to do the work for 1/2 the rate and sending the money to the family back in their homeland while living in overcrowded apartments and sleeping in shifts. This is already happening but is not seen by most of the population because they do in fact run under the cover of darkness, leaving well before dawn and arriving back at their "homes" deep into the evening hours.

If you think that as an owner of the business you would not be impacted by this you're mistaken. As time goes on another contractor would be able to take on more work and use more of this new cheap labor by providing the housing, transportation etc for these new "contractors". With less overhead now he can undercut you. There again this is already happening. I have seen it first hand, you just have to take a look at the other trades in tract housing segment of this industry. How is a immigrant without a credit or work history buying these new $45,000 trucks? I imagine this is also beginning to creep into the build outs for some of the large discount chains as well.

As stated above several times. I also find this immoral, unethical and illegal

FRANK
 
just for the record frank, you and i are comparing apples and oranges....everything you fear, can and does happen when wages are paid by the hour.

so i really don't get your point...
 
we are 20 yrs behind the plumbers and HVAC guys in terms of thinking...we need all you old timers to hurry up and die and stop polluting the minds of the industries young
Click to expand...

Yeah I am awaiting the BIG ONE as I add nothing to our trade.

Not all old timers know everything, but we have some experience. And not all young whipper snappers have all the answers, but they may know the right questions.

I have been around PIECE workers and the SYSTEM SUCKS...........
 
brian john said:
Yeah I am awaiting the BIG ONE as I add nothing to our trade.

Not all old timers know everything, but we have some experience. And not all young whipper snappers have all the answers, but they may know the right questions.

I have been around PIECE workers and the SYSTEM SUCKS...........
Click to expand...

brian...you forgot to quote the most important part of that post...the ":D"

i've been around hourly workers...and the SYSTEM SUCKS...so what's your point?
 
Each system can suck for different reasons.

A maxim I picked up years ago: Any management system can work but to really work it needs to be applied consistantly.

Very little in electrical work short of new tract resi and some flat rate service will survive flat rate pay before everyone on BOTH sides of the check is stewing about getting screwed by it.

If the EC has his act together enough to be able to deliver a job plan to his crew that has all ducks in a row at the outset (let alone the RFI's solved) then he probably has a good handle on what his crew is capable of doing in a typical days work as well.

If the EC can't (for whatever reason) deliver a clean job plan to his crew then all the creative wage plans in the world won't solve his problems.

An honest days wage (and bene's) for an honest days work.
Whats so hard about that?
 
ding ding ding....

there is nothing wrong with an honest days wage for an honest days work...there's just more than one way to accomplish it:D

flat rate/piecework/commission/whatever you want to call it, is not right for every situation or every contractor/employee...but that doesn't make it any more illegal, immoral or unethical than an hourly rate system..

like everything else in life, name a system and someone will try to cheat it...

but mostly a properly run flat pay/piecework system is better than a poorly administered hourly system...and vice versa...

don't be so stuck in your ways people...
 
emahler said:
but mostly a properly run flat pay/piecework system is better than a poorly administered hourly system...and vice versa...
Click to expand...
There is a lot more information that is easily obtainable to run an hourly system. Plus, it's a familiar system. Guys don't take too quickly to a system that is unfamiliar that relates to their paycheck. They may well like the commission system in the end, after the learning is done. The suspicion is understandable, since few things cause personal stress and anxiety the way personal finances do.

From the employer's standpoint, there's precious little educational material on how to run a properly administrated commission system for tradespeople. That information seems to be mostly locked up, costing $$$'s to learn about. I even asked this guy with a name the same as yours if he had any he could forward to me so I could learn more about it, but I never heard back. ;)
 
mdshunk said:
There is a lot more information that is easily obtainable to run an hourly system. Plus, it's a familiar system. Guys don't take too quickly to a system that is unfamiliar that relates to their paycheck. They may well like the commission system in the end, after the learning is done. The suspicion is understandable, since few things cause personal stress and anxiety the way personal finances do.

From the employer's standpoint, there's precious little educational material on how to run a properly administrated commission system for tradespeople. That information seems to be mostly locked up, costing $$$'s to learn about. I even asked this guy with a name the same as yours if he had any he could forward to me so I could learn more about it, but I never heard back. ;)
Click to expand...

that dude is a slacker...he never gets anything done...:D
 
mdshunk said:
There is a lot more information that is easily obtainable to run an hourly system. Plus, it's a familiar system. Guys don't take too quickly to a system that is unfamiliar that relates to their paycheck. They may well like the commission system in the end, after the learning is done. The suspicion is understandable, since few things cause personal stress and anxiety the way personal finances do.

From the employer's standpoint, there's precious little educational material on how to run a properly administrated commission system for tradespeople. That information seems to be mostly locked up, costing $$$'s to learn about. I even asked this guy with a name the same as yours if he had any he could forward to me so I could learn more about it, but I never heard back. ;)
Click to expand...
Easy to understand by both parties employer and employee,satelite company pays piecework (I.E. commission) on installs you have to get in and get out quickly to make money I talked to one installer and he said over 45 minutes and you lost money most installs were 1-2 hours counting travel time they have a high turnover rate.
 
Rewire said:
Easy to understand by both parties employer and employee,satelite company pays piecework (I.E. commission) on installs you have to get in and get out quickly to make money I talked to one installer and he said over 45 minutes and you lost money most installs were 1-2 hours counting travel time they have a high turnover rate.
Click to expand...

that's a bad system....but what is the alternative? what is the solution?
 
Rewire said:
...satelite company pays piecework (I.E. commission) on installs you have to get in and get out quickly to make money I talked to one installer and he said over 45 minutes and you lost money ....
Click to expand...
I was doning some work at a guy's house and the Direct TV man was there doing an install. His hammer drill burned up while he was working. I know they're on a suck-butt commission schedule, so I let him use mine since I was there anyhow. He was very appreciative. I figured it was the least I could do for the least of these.
 
the ""
Click to expand...

Was not intentionally left out I know there was a grin in your post...

In my expierence I have seen little benefit to employees from firms that do piece work. Drywallers work their buns off, till they can't produce at the high level required to make a living. Backs go and then they go, to what labor's? And the piece means hang it and leave it...Lacks quality.


Piece work is akin to assembly line work I just can't see this benefiting the trade or employees, in the long run.
 
I'm surprised that no one had picked up and ran with the statement that Eric made that if you are giving a fixed/contract price, you are fundamentally working by the piece. Take too long to install said piece, and you lose, take less time and you win.

I know there is a vast difference between paying employees by the piece vs. paying workers hourly to install the piece that you gave a fixed price for, but the end result is the same - that the piece gets installed for a certain price and you have to figure out how to make money on it.
 
Status
Not open for further replies.
Top