Lost tools

[cowboyjwc]

The thing is if he loses it and has to pay, the money comes out of his pocket, if the boss loses it it comes out of the company's funds and it's a write off. I agree with jes25 and a couple of the others, things happen.

Had my boss accuse me one time of losing a Sawzall until he realized (after I reminded him) that it had been in his truck and he was the one using it. Of course that's also when it became my job to make sure all the tools were picked up.:grin:

 

[jeremysterling]

Look on Ebay you can pick these up all day long for a couple hundred dollars!
Make him pay for it in $25 a week payments. If I lost any company tool I wouldnt get in trouble but I feel I would have to replace it. It happens!

A co-worker lost the company's hydraulic KO set, greenlee to 4". He replaced it with from eBay for around 25% of a new set.

It has been around five years, the co-worker has moved on and we still use the eBay set.

 

[ty]

The thing is if he loses it and has to pay, the money comes out of his pocket, if the boss loses it it comes out of the company's funds and it's a write off.

I don't quite understand this mentality.
So, if the boss (owner) loses it, and the money comes out of company funding(the Boss' pocket), it is OK because of some mysterious write-off?

There is no such thing as a write-off.
There is a such thing as a deduction. Which would come off of gross revenue.
But the cost of a lost tool cannot be 'written off'. The original cost of the tool could be deducted, and if the cost is high enough, it could be depreciated at the time of original purchase. The cost of the replacement could be deducted(or depreciated) at time of replacement purchase.

If the employee was to pay for lost items, the company has no right to the deduction(or depreciation) of the replacement.
Many employers will try this scam, which is tax fraud.

Back to the Deductions for a second.
To have a deduction, you have to pay for something.
As the owner of the company, I don't want to have to pay for something, just to get a deduction. In a perfect world, I would pay for nothing and have no deductions, and keep all my money.
I do not understand the mentality 'oh buy this, it's a deduction.'
That is not good business sense.


Now:
I agree that anyone can and will make a mistake.
But, where does responsibility lie?
This country is full of people that do not want to take responsibility for their actions.
This guy lost an important and costly piece of equipment.

Over the years, my attitude on this has gone back and forth. Should the irresponsible employee pay or not? Morrally and Ethically, Absolutely.
Can you LEGALLY take the money out of his check? Nope. (and in some states, it doesn't even matter if he signed a statement saying you can). Check with your Lawyer.

Can you make arrangements with the employee to deduct the cost, or just withold the money? You can try. (he could allow you to, or you could just withold it, and he later could possibly sue you).
Should you? only you can answer that one.

Whether or not you ask the employee to pay for in full or in part for lost or stolen equipment is a decision you alone have to decide. But, check with your lawyer, first.

You can always fire the employee.
This sometimes is the only solution.

 

[ptonsparky]

I'm not going to make him pay. A couple of "Is the tailgate shut?" will twist the knife enough to see him squirm. I know this stuff happens, just wondering how others handle it.

 

[ty]

I'm not going to make him pay. A couple of "Is the tailgate shut?" will twist the knife enough to see him squirm. I know this stuff happens, just wondering how others handle it.

I have said in years past on this very topic, that at minimum, he would be the new 'on call' guy on Saturdays, and would always be 'the guy' when a ditch needs to be dug.

 

[jaylectricity]

I don't quite understand this mentality.
So, if the boss (owner) loses it, and the money comes out of company funding(the Boss' pocket), it is OK because of some mysterious write-off?

There is no such thing as a write-off.

Reminds me of that Seinfeld episode where Kramer convinces Jerry to send his broken stereo through the mail and pay for the insurance.

Jerry : So were going to make the Post Office pay for my new stereo?
Kramer : It's just a write off for them.
Jerry : How is it a write off?
Kramer : They just write it off.
Jerry : Write it off what?
Kramer : Jerry all these big companies they write off everything
Jerry : You don't even know what a write off is.
Kramer : Do you?
Jerry : No. I don't.
Kramer : But they do and they are the ones writing it off.
Jerry : I wish I just had the last twenty seconds of my life back.

 

[ty]

Reminds me of that Seinfeld episode where Kramer convinces Jerry to send his broken stereo through the mail and pay for the insurance.

Jerry : So were going to make the Post Office pay for my new stereo?
Kramer : It's just a write off for them.
Jerry : How is it a write off?
Kramer : They just write it off.
Jerry : Write it off what?
Kramer : Jerry all these big companies they write off everything
Jerry : You don't even know what a write off is.
Kramer : Do you?
Jerry : No. I don't.
Kramer : But they do and they are the ones writing it off.
Jerry : I wish I just had the last twenty seconds of my life back.

LOL! ver batum?

 

[jaylectricity]

But anyway, you can write it off your taxes and make the employee pay for the tool minus the taxes you'll save on your gross revenue for writing it off as a loss.

 

[jaylectricity]

LOL! ver batum?

I knew the jist of the quote and googled it for accuracy. But yeah, that's verbatim.

 

[ty]

I knew the jist of the quote and googled it for accuracy. But yeah, that's verbatim.

Whew! for a second there I thought you knew the dialogue by heart.:grin:

 

[readydave8]

As a employer I would try to decide which way I'd make more money, probably if it was a good employee not make him pay thinking I'm buying some loyalty (what I've usually done, although not for as much as $800. Employees cost me unnecesary expenses every day, some of it is just the cost of doing business.)

As an employee I have always tried to pay or share the costs so that I wouldn't feel like I had an obligation.

 

[shockin]

I view it as a simple mistake. I also view the fact that it is a TOOL as irrelavent. Lets say that the mistake that was made was an employee cutting a loaded neutral and burning up a customers computer. (True story) Do you make the employee replace it? Lets say an employee scratches a hard wood floor moving a refridgerator out. (True story) Do you make them pay for the floor? What if your pulling in six parallel sets of 750 CU and the employee adds 10' to each run. (True story) It's clearly not the most cost effective approach, do you dock their pay for wasting the wire?

I don't think it's fair to dock an employee for a mistake that costs you monay on a project. If you do think it's fair I assume that you also right them a check for any and all profits on a job when they do make you money. Can't have it both ways. Bottom line, mistakes happen.

 

[petersonra]

It can if it's set up that way and the employee knew prior to losing the tool they would be financially responsible.

Some companies have a policy the employee signs upon hiring that they are 'issued' a tool and they are responsible for it. But if such a policy isn't made clear from the beginning, they can't just initiate on out of frustration.

This is often true, you just cannot normally dock their pay to cover the expense, as an earlier poster suggested.

In fairness, he should not have to pay for the cost of a new tool. The tool he lost was used, and thats what he should pay for if it is decided he needs to pay anything.

 

[cowboyjwc]

I don't quite understand this mentality.
So, if the boss (owner) loses it, and the money comes out of company funding(the Boss' pocket), it is OK because of some mysterious write-off?

There is no such thing as a write-off.
There is a such thing as a deduction. Which would come off of gross revenue.
But the cost of a lost tool cannot be 'written off'. The original cost of the tool could be deducted, and if the cost is high enough, it could be depreciated at the time of original purchase. The cost of the replacement could be deducted(or depreciated) at time of replacement purchase.

If the employee was to pay for lost items, the company has no right to the deduction(or depreciation) of the replacement.
Many employers will try this scam, which is tax fraud.

Back to the Deductions for a second.
To have a deduction, you have to pay for something.
As the owner of the company, I don't want to have to pay for something, just to get a deduction. In a perfect world, I would pay for nothing and have no deductions, and keep all my money.
I do not understand the mentality 'oh buy this, it's a deduction.'
That is not good business sense.


Now:
I agree that anyone can and will make a mistake.
But, where does responsibility lie?
This country is full of people that do not want to take responsibility for their actions.
This guy lost an important and costly piece of equipment.

Over the years, my attitude on this has gone back and forth. Should the irresponsible employee pay or not? Morrally and Ethically, Absolutely.
Can you LEGALLY take the money out of his check? Nope. (and in some states, it doesn't even matter if he signed a statement saying you can). Check with your Lawyer.

Can you make arrangements with the employee to deduct the cost, or just withold the money? You can try. (he could allow you to, or you could just withold it, and he later could possibly sue you).
Should you? only you can answer that one.

Whether or not you ask the employee to pay for in full or in part for lost or stolen equipment is a decision you alone have to decide. But, check with your lawyer, first.

You can always fire the employee.
This sometimes is the only solution.

Let's say you pay the employee $100 a week and you expect him to pay for that tool that means basically he won't get paid for eight weeks. As the employer you pay yourself $200 a week, but the business also has a tool budget, so you had a deduction which you should have taken when you originally bought the tool and that you take every year for depriciation. The new tool which you probably already had money set aside for is once again "deducted". Personally that tool didn't cost you anything, like someone said it's the cost of doing business. Thinking of the businesses money as your money is what get's a lot of contractors in trouble.

It's like when employers make employees drive their own trucks. The only thing the employee can deduct is the milage, while you get to depriciate your truck and deduct all of the expenses that are paid to keep the truck running.

 

[satcom]

I view it as a simple mistake. I also view the fact that it is a TOOL as irrelavent. Lets say that the mistake that was made was an employee cutting a loaded neutral and burning up a customers computer. (True story) Do you make the employee replace it? Lets say an employee scratches a hard wood floor moving a refridgerator out. (True story) Do you make them pay for the floor? What if your pulling in six parallel sets of 750 CU and the employee adds 10' to each run. (True story) It's clearly not the most cost effective approach, do you dock their pay for wasting the wire?

I don't think it's fair to dock an employee for a mistake that costs you monay on a project. If you do think it's fair I assume that you also right them a check for any and all profits on a job when they do make you money. Can't have it both ways. Bottom line, mistakes happen.

Being careless with tools assigned to you, is not a mistake, it is a poor habit of not respecting the property of others.

 

[shockin]

Being careless with tools assigned to you, is not a mistake, it is a poor habit of not respecting the property of others.

I disagree, here is the definition of MISTAKE:

a wrong action attributable to bad judgment or ignorance or inattention

I am assuming that the employee did not do this intentionaly or on purpose or the OP would have fired him immediatly. Therefore it is a mistake, same as the others I listed above.

 

[ty]

Let's say you pay the employee $100 a week and you expect him to pay for that tool that means basically he won't get paid for eight weeks. As the employer you pay yourself $200 a week, but the business also has a tool budget, so you had a deduction which you should have taken when you originally bought the tool and that you take every year for depriciation. The new tool which you probably already had money set aside for is once again "deducted". Personally that tool didn't cost you anything, like someone said it's the cost of doing business. Thinking of the businesses money as your money is what get's a lot of contractors in trouble.

It's like when employers make employees drive their own trucks. The only thing the employee can deduct is the milage, while you get to depriciate your truck and deduct all of the expenses that are paid to keep the truck running.

Not true at all.
A tool budget isn't thought of for replacing high cost tools that an irresponsible employee lost, misplaced, or was careless to keep. It is for buying new tools that might be needed or replacing old or worn out tools.
So shelling out money on something that should not have been in the first place is a loss.
So, as the owner of the company, I lost $$. Because at the end of the year, all profits (including unspent tool allowances, and things like advertising allowances, etc.) go in my pocket, or into Employee bonuses, etc. This is simple business calculations.
And I disagree. Thinking of the Business' money as the owners money helps contractors stay in business. They keep a tight hold on what is spent and how it is spent.
The ones that treat it the other way, lose account of where it goes, and why.


Most of the time, mileage is a better deduction than maintenance reciepts. You also cannot change from mileage to receipts year to year. Whatever you claim the first year on a particular vehicle is what you Must always claim. And you cannot claim mileage AND receipts. The IRS won't allow that at all.

 

[satcom]

a wrong action attributable to bad judgment or ignorance or inattention
That describes an employee you need to get rid of before he takes your company down with his bad judgment or ignorance or inattention
[/QUOTE]

 

[petersonra]

It's like when employers make employees drive their own trucks. The only thing the employee can deduct is the milage, while you get to depriciate your truck and deduct all of the expenses that are paid to keep the truck running.

The IRS mileage allowance is generous enough that it is supposed to cover all the expenses involved in using a personal vehicle. Most companies pay mileage on a per mile basis direct to the employee when they have him use his personal vehicle on company business. An employee cannot take a tax deduction for mileage incurred merely driving to and from work though.

As for the writeoff issue, its not that simple. Its not like if $1000 worth of tools is stolen that the business gets $1000 from the government, or pays $1000 less in taxes. If the tools were expensed, the deduction was already taken and you get nothing out of it. If they were bought and depreciated, the business can count whatever the original cost of the tools was less whatever depreciation has already been taken, and count that as an expense. This expense reduces the gross income of the business that taxes are paid on, just like any other expense (such as fuel for the company trucks).

 

[dmagyar]

Lost tools

Of the few tools I've lost over the course of my career all were my own. As far as now being an employer the money still comes from the same place, before profits. I have known many electricians that didn't exhibit much concern about they're employers tools and that's not right. But it's a mind set thing. We all need each other, we need employers to gain employment, we need skilled electricians so that we can man the jobs that we've bid and sometimes win. Its a team approach, no one suceeds without both parties.

By the same note though on one job, while working for another contractor an electrician didn't tie the ground conductor to the pulling head well enough. The wire came off in the pipe, it bunched up and stopped the pull. It cost thousands pulling four 500 MCM wires back out of the pipe, scraping all of the wire and then having to spend the time repulling the wire. A big mistake but still a mistake. Live and learn.