Piece work?

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Aledrell

Senior Member
Collective Bargaining.

Collective Bargaining.

legally? because it makes them subcontractors.
and violates a passle of labor laws, unless part
of a collective bargaining agreement....

W-2 = employee
1099 = subcontractor

so, the simple solution is to become affiliated
with a collective bargaining organization,
and then try to include piecework in the working
agreement.... simple, yes? :D

You union guys think everyone and every state is union like you. Where I am from right to work state you can 1099 employee's but your liabilty insurance must cover your sub-contractors (1099 employees) and have all (1099) sign some waiver stating they are paying for their own workmen comp ins or something like that.
 

emahler

Senior Member
You union guys think everyone and every state is union like you. Where I am from right to work state you can 1099 employee's but your liabilty insurance must cover your sub-contractors (1099 employees) and have all (1099) sign some waiver stating they are paying for their own workmen comp ins or something like that.

every electrician on this board is paid by piecework...the only difference is the piece used as the token of measurement...even hourly guys are paid piecework...that piece being the unit of time....

additionally, there is nothing anymore illegal about paying a guy based on what he produces, than there is paying him on how many hours he works...you have to follow the same labor laws for both...

just because you pay piecework, doesn't require you to 1099 the guy as a sub...
 

cowboyjwc

Moderator
Staff member
Location
Simi Valley, CA
Back in the early 80's I was making about $10 an hour maybe less, when Los Angeles made it madatory that apartments have smoke detectors retro fitted. My boss told me that he would pay me $10 a detector to install them. On a good day I could do 20, on a bad day I could do 10, so here I am a 19 year old kid making upwards of $1000 a week thinking I was in hog heaven. Then the politics started and The City of LA kept changing the rules on how they wanted them done. I got paid to install them, but I made corrections on my own time and by my own time I don't mean during work hours.

Guys that are good at what they do can make a lot of money doing piece work, but I find that most guys that do piece work do not care that much about quality.
 

ITO

Senior Member
Location
Texas
Its SOP for home builders around here. Well maybe not custom home builders, but the big builders like KB, Pulte, Meritage, ect.

They hire a licensed EC and he furnishes the material and breaks the jobs down into pieces. The labor furnishes their own tools, and consumables.

1) Service lateral
2) Service
3) Rough-in
4) Trim out

Generally the EC (Patrono) speaks Spanish or finds an English speaking Mexican (El Hefe) to runs his own crews of his choosing. The EC makes a deal with the foreman for how much each piece is worth and pays in cash as each is completed. The Foreman then pays his guys based on what ever deal he made with them.

The EC periodically walks the jobs (or should) checking code compliance and calling inspections.

This same model is used for framing, roofing, insulating, plumbing, parts of mechanical, flooring, drywall, finishing and concrete.
 
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legally? because it makes them subcontractors.
and violates a passle of labor laws, unless part
of a collective bargaining agreement....

W-2 = employee
1099 = subcontractor...

wow...completely incorrect...please do a search here before you type

hmm... I thought Fulthrotl's statement was true.

I guess I thought so because hiring someone to perform piecework lets them dictate their own scheduling and assigns a set price... which would by definiation make them a sub...

I will research this more.

Thanks for the info.
Greg
 

steelersman

Senior Member
Location
Lake Ridge, VA
Does anyone pay by piece work?
I have worked with metal framers and sheet rocker who get paid in this fashion.

Does anyone have experience in this method of payment in regard to roughing out? Thank you for your time.

JJ
when I was in a sort of transition phase of being better than a helper but not quite a mechanic me and the guy who taught me all I knew about residential went to work for a company that only paid piecework and we wired apartments, condo, and duplexes at 3 different jobsites. To be honest it was the best money I had ever earned up to that point in my career so I was loving it. We were splitting the money 35/65 at first and after a few months 40/60. Eventually I branched out on my own and got my own helper and I loved it until it was all gone. Eventually all of this particular companies jobs were done in my area and if we wanted to continue with them then we would have had to travel down south to N.Carolina and Tennessee. And there was no way I was going to go to either of those dilapidated states!! :)
joking!:)
 

emahler

Senior Member
hmm... I thought Fulthrotl's statement was true.

I guess I thought so because hiring someone to perform piecework lets them dictate their own scheduling and assigns a set price... which would by definiation make them a sub...

I will research this more.

Thanks for the info.
Greg

not at all greg...i hire you to install electrical work for my company. I hire you at the rate of $20/hr, and you are to work Mon-Fri from 7-3:30pm. I'll pay you $20/hr, plus benefits and burden. I'll withhold your payroll taxes and issue you a W2 at the end of the year....

or, I hire you to install electrical work for my company. you will still work Mon-Fri from 7-3:30pm...only on this project, we are installing light fixtures in an office...we agree that I will pay you $20/fixture...plus benefits and burden...i will also withhold payroll taxes and issue you a W2 at the end of the year....

what's the difference between the two?
 

George Stolz

Moderator
Staff member
Location
Windsor, CO NEC: 2017
Occupation
Service Manager
In my case, there was a flat rate paid of $8 per hole. That is, a three gang box consisting of three switches was three holes. $8 per range, dryer, furnace, recessed can, everything.

Payout was 60% Rough, 40% Trim. The service and lateral were not paid, it was considered lumped in with the overall house. Temp power was considered rough, or just absorbed by the office, I'm not sure.

To make it worthwhile to get a license, each employee still had an hourly rate. So if a journeyman made $20/hr, and his apprentice earned $10/hr, then the j-man received 66% of the proceeds and the apprentice got 33%.

But what if one guy worked longer than the next? So, we still had to fill out timecards and indicate on them what was hourly and piecework. So, if the j-man worked 20 hours on the house and the apprentice worked 10 hours, then that would be reflected on the paychecks. I just tried to recreate the math and failed. I have no idea how they figured that out.

On top of that, the office removed $75 from the rough-in money to insure against screw-ups discovered at trim. If the trim crew reported no serious mistakes, then the rough crew would get the $75 months later when the house was finaled.

But how do you keep the hardworking apprentice from discovering his boss makes twice as much per hour as he does? This could be a big problem with a two-year apprentice and a two-year R.W. If the pair worked equal hours, then it would be easy to deduce the earnings of the other if the overall payout was known. The solution to that was to call the piecework earnings from a house " 1 Hour @ $457.12 " or whatever the payment wound up being. Of course, the office didn't feel obliged to tell you what house that money came from.

One of the selling features of piecework was that you could work "at your own pace, on your own schedule." Well, that's a great slogan, but obviously the GC would have a problem drafting a schedule around the numerous European trips you'd be taking with the massive earnings you were pulling in, so that was not really a credible notion.

Speaking of GCs, have you ever seen GCs call for a house to be roughed before it's ready? Should the employee pay out for being called out too early to start the job?

What dollar value can you assign to knowing that your check is going to be the same this Friday as it was last Friday, with easily verifiable numbers to be sure you were paid right? For me, it was worth $6/hr compared to a good piecework week. The Rube Goldberg contraption detailed above was probably started on a very simple principle, which became wildly complicated when they tried to apply a touch of fairness to the process.

emahler said:
but like i said, every single electrical contractor who gives a fixed price for a project works on piecework...why can't it work for employees?
My experience is very specific - in that case, the difference between the EC and the JW is that the EC operates in a much bigger pond than the JW. If one job performs 1% worse than expected in a month, there are likely three jobs that performed 3% better than bid.

The one guy who got stiffed with a crummy GC who scheduled all his trades in the same broom closet on the same day normally performed well and got stuck in an unproductive environment. Why shouldn't the EC partake in the loss when the other three jobs are lifting the company up?

With piecework, the man in the field is a frontiersman with no net. That guy usually has a lot fewer perks than the guy in the office.

IMO, it's simply a crutch for lousy managers. Properly supervised, tracked and informed employees are more productive and produce better work, IMO. With piecework, you can get a spreadsheet all worked out, and the computer manages your employees with the most sensitive prod, the paycheck. Those same computers can be put to better use tracking and providing instant feedback on production for coaching.
 

Fulthrotl

~Autocorrect is My Worst Enema.~
You union guys think everyone and every state is union like you. Where I am from right to work state you can 1099 employee's but your liabilty insurance must cover your sub-contractors (1099 employees) and have all (1099) sign some waiver stating they are paying for their own workmen comp ins or something like that.

union guys? excuse me, your attitude is showing.
you don't know anything about me. don't characterize me, you
have no idea what you are talking about.

nowhere in my post did i say i was affiliated with ANY union.

what i *did* say, was that you could join a collective bargaining
agreement, and then try to include piecework in that agreement.

it was a tongue in cheek comment. if you knew half as much about
collective bargaining as you think you do, you would realize that
no electrician's union has EVER considered piecework as a part of
ANY contract.... they would have a hissy fit at the mere IDEA of
such a thing.

now that we have cleared that up, the actual fact of the matter
is that we are BOTH inaccurate about labor laws. my wife, who is
a compensation director for a national concern, informed me that
both of us do not know what we are talking about. we are both
about 1/3 right.

i can assure you however, that my 1/3 of being right in no way
overlaps your 1/3 of being right.

go right ahead and 1099 those people you claim are subcontractors.
the IRS may disagree with you, and hold you liable for the taxes
you failed to withhold for those "subcontractors".

there are a number of tests the IRS uses in determining if a person
is a subcontractor or employee... i won't waste your time listing
them, as your 1/3 of being right will hold you in good stead.

have a nice day.
 

ITO

Senior Member
Location
Texas
...union guys? excuse me, your attitude is showing.
you don't know anything about me. don't characterize me, you
have no idea what you are talking about.

nowhere in my post did i say i was affiliated with ANY union.

what i *did* say, was...[bla bla bla].

...
so, the simple solution is to become affiliated
with a collective bargaining organization,
and then try to include piecework in the working
agreement.... simple, yes? :D

Maybe I miss understood too but it?s seems hard to take that last statement any other way.

One thing to keep in mind, we as Americans will have to deal with the piece work concept sooner or later, our direct manufacturing competitors, China uses this model extensively. We in the service industry are not as affected but the labor I see from over the borders has no qualms with building residential that way.

Whether you are for or against organized labor and collective bargaining is not really relevant, we live in a free market and it will decide how business is done and who has the market share. Ask the average home buyer how the labor that built their home was funded and see if they even know, but they probably could tell you price per square foot comparisons for 3 other builders and what a great deal they got. We all have the Wallmart mentality and people are not willing to pay more on principle.
 
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