Need advice on Hiring that first employee.

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titan1021

titan1021

Senior Member
Location
Northern California
I am hoping to get some advice on hiring my first employee. I've been working for my self for the past year and a half, and have been steady with jobs. I 've had some nice size commercial jobs and large residential jobs, and luckily I've been able to get some help with these. However, as the larger jobs become more frequent I could really use an employee, and having at least one employee would allow me to pursue the kind of work I really want to do.

I hoping to get some advice from contractors who have been there.
Is there any rule of thumb or guidelines, as to when your ready or when you should hire an employee?

Any advice, tips, or suggestions would be greatly appreciated.

THANK YOU
 
I was a 4 year apprentice when I met my current boss, I got my license a couple months after, and been with him for 10 years now... I hope you have good luck finding a good employee, but remember you also need to be a good employer...
 
titan1021 said:
I am hoping to get some advice on hiring my first employee. I've been working for my self for the past year and a half, and have been steady with jobs. I 've had some nice size commercial jobs and large residential jobs, and luckily I've been able to get some help with these. However, as the larger jobs become more frequent I could really use an employee, and having at least one employee would allow me to pursue the kind of work I really want to do.

I hoping to get some advice from contractors who have been there.
Is there any rule of thumb or guidelines, as to when your ready or when you should hire an employee?

Any advice, tips, or suggestions would be greatly appreciated.

THANK YOU
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Look closely at your states tax requirements. Once you become an employer and get a state tax ID number your costs will increase. In most cases you might be required to add Workmans Compensation Insurance. All this will vary state to state.

Consider geting a helper. Pay cash or check and 1099 at the end of the year.

I would also consult with a Certified Public Accountant. They could give you a lot of tax advise on handling employees.

Good Luck!
 
mdshunk said:
That sounds cool, until you figure out that this is illegal.
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see this is why Plumbers make more than electricians...they don't worry about all the pesky little stuff like we do:D
 
BackInTheHabit said:
Consider geting a helper. Pay cash or check and 1099 at the end of the year.


Good Luck!
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This would make them a "Sub". Fine, but understand, you cannot set their hours. If you do, That makes them an employee. Back where we started.

Be carefull. Every time I ask for help....They send me someone who needs it!!
 
keesha said:
This would make them a "Sub". Fine, but understand, you cannot set their hours. If you do, That makes them an employee. Back where we started.

Be carefull. Every time I ask for help....They send me someone who needs it!!
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I understand that in paying cash or piece work to someone that you cannot dictate your requirements to them because the IRS considers that a subcontractor. I have had both subs and employees. Before I hired employees I looked into the IRS definition of a sub versus employee. I wanted more control. So I hired employees. It's a Catch-22 between subs and employees. One must do his research. A good accountant doesn't hurt either.
 
BackInTheHabit said:
How is issuing a 1099 illegal? Enlighten me.
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It's not, if they are a subcontractor. A guy who works for you, at your direction, as his full time job (or only job if part time) is an employee. Paying an employee with a 1099 is illegal. This is business 101 stuff here.

See the IRS rules on the difference between a 1099 sub and a W2 employee.
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

To make it simple, check the boxes on this handy "20 rule test" and see what you come up with:
http://www.wm.edu/grants/HANDBOOK/irs20ruletest.htm
 
mdshunk said:
It's not, if they are a subcontractor. A guy who works for you, at your direction, as his full time job (or only job if part time) is an employee. Paying an employee with a 1099 is illegal. This is business 101 stuff here.

I wasn't saying I was giving a 1099 to my employees. I only gave a 1099 to a sub that I had before I had employees. I withheld taxes on my employees. My CPA would do the payroll.

If I phrased it in my first few posts that I gave a 1099 to my employees, that was not my intention.
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state licensing requirements also come into play....in NJ, i can not pay someone as a sub to do electrical work, unless they are licensed and insured...regardless of their hours or direction...

might be legal in Kentucky, but not legal here...
 
Back to the OP

Back to the OP

titan1021 said:
I am hoping to get some advice on hiring my first employee. I've been working for my self for the past year and a half, and have been steady with jobs.
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Steady with jobs is the key.
With commercial work you (probably) need more than just a 'helper'.

Think back over your career to guys you have worked with in the past for the technical and personality characteristics that will blend in best with your own strengths AND weaknesses.

Most guys who can 'hit the ground running' are going to already have jobs.
Do you have the time to 'grow your own' ?

No one can answer these questions for you but having these questions to ask lined out may help. Good luck.
 
I would first ask if your business plan includes hiring help.

No business plan? Uh-oh!

Can you keep a helper busy? Can you afford to pay them on a regular basis?

Are you prepared to deal with taxes, insurance, workers comp., unemployment, OSHA, labor laws, the additional bookkeeping & paperwork....ad infitium ad nauseum. In other words, are you prepared for an employee?

Keep in mind that hiring an employee is much like getting married. And the 'divorce' can be a real business-buster!
 
Hiring just one employee can create some additional problems. What is this person going to do when you are checking jobs, meeting customers, doing this or that (other than production work).

This is the problem I have. I have one employee. Work has just about stopped for me. I'm spending a lot of my time looking for new work. My employee is only capable of performing a limited amount of work w/out me on the site (talking skills, not law here). So what do I do going forward? I have 3 large jobs that appear to be coming my way (time frame is up in the air). I will need his help. Do I pay him to do nothing? Do I send him home and say sorry?

I used to work all day with him, come home, do estimates, paperwork, etc. Then go out and do it all again tomorrow. That was fine then, but now I'm ready to just work 40-hours a week. If I had a 2-man crew that I kept busy, it would allow me to do the business stuff during the day and keep work flowing.

Good luck.
 
emahler said:
state licensing requirements also come into play....in NJ, i can not pay someone as a sub to do electrical work, unless they are licensed and insured...regardless of their hours or direction...

might be legal in Kentucky, but not legal here...
Click to expand...


It was legal five years ago when I had a sub. I think they have since amended the state laws.
 
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