Service Work Pay Opinions wanted!

[petersonra]

I still believe the company vehicle can be beneficial to an employee more than the employer...most of the time. Let's use the last example...how often are you stopping to get materials for a home project? Probably not very often at all. How often are you stopping to get something at a Quick Stop...probably daily. Let's say you average 15 miles one way to your shop...that's 7500 miles a year at 50 weeks that isn't out on your personal vehicle. Call your insurance company and tell them you have just reduced your vehicle mileage by 7500 miles per year...if they don't reduce your premium...get a different insurance company! Personal fuel costs saved per year about $1300! Equivalent to about .60/hr increase in After tax income. In a lot of cases I've seen it allowed a family to only have to maintain one vehicle personally. And above all that...the employer accepts ALL liability for whatever happens in that vehicle...period! Seems generous to me....of course I am an employer currently and have a biased opinion.

If there is no business reason for the take home vehicle, there is a form you are supposed to fill out and send to the IRS annually akin to a 1099 so the employee can pay the taxes on the use of the vehicle. there are a couple of ways to handle it, but the simplest way is by mileage where you report 54 cents per mile the employee drove the vehicle for personal business as income to the employee.

Since you appear to be stating you are allowing the employee to use the vehicle as a convenience to him and not for any business reason, you are committing tax fraud if you don't report it.

BTW, the IRS now pays bounties of 15% for people that report tax cheats after the IRS extracts unpaid taxes and penalties from them.

 

[jahilliard]

Ok so basically your employer did make an effort...but you're particular living arrangement kept you from reaping the benefits. That sucks. What does YMMV mean?

 

[jahilliard]

Blah blah blah!! Not a fan of the IRS at all. And I certainly don't appreciate threats or "bounties"! Lawyers and all this tax and IRS crap is annoying. Basically, it frustrates you that I'm making valid points, looking at the reality objectively...and you come back with what the government rules are...ugh! BORING!!! Detach yourself from the herd...have a genuine opinion and the guts to give it. Respond objectively with an educated opinion and respect the opinions of others. Ya know...all the stuff the government and the IRS don't do!!

 

[cowboyjwc]

I would be surprised if the city would allow any personal use of the truck. In that case, how is it a benefit? An ex-employer of mine tried to get me to take home my truck. So I quizzed him on circumstances of use, etc. Basically, if I wanted to stop off at QuickCheck on the way home to grab a soda, that was OK. Not so much a stop at Home Depot to pick up something for a weekend home project. And definitely not picking up a bunch of plywood on the weekend. The real advantage was all his; I could take an emergency call right from my house instead of taking 15 minutes to run into the shop to pick up the truck. I declined his "generous" offer!

Oh no, no personal use of the truck you had to go straight home. The benefit was actually more to the city, CA had a program where employers with 500 or more employees had to reduce the number of cars in their parking lot by, I believe it was 20%, so the incentives were, $3.00 a day for every day you carpooled or you could use the city truck, and you get a free day off every six months if you have 70 trips. Then the IRS started to tax it all and we gave up the money and the trucks, but we still get the free day off if we carpool.

 

[JFletcher]

hill

hill

If there is no business reason for the take home vehicle, there is a form you are supposed to fill out and send to the IRS annually akin to a 1099 so the employee can pay the taxes on the use of the vehicle. there are a couple of ways to handle it, but the simplest way is by mileage where you report 54 cents per mile the employee drove the vehicle for personal business as income to the employee.

Since you appear to be stating you are allowing the employee to use the vehicle as a convenience to him and not for any business reason, you are committing tax fraud if you don't report it.

BTW, the IRS now pays bounties of 15% for people that report tax cheats after the IRS extracts unpaid taxes and penalties from them.

What taxes would those be? The only vehicle taxes Im familiar with are personal property, which is on the owner, same as tags, city sticker (if applicable), state inspection, registration, and so on.

He forgot to mention the employee fuels, washes and maintains the vehicle, and is on emergency stand-by. And keeps it a locked garage at his house for security reasons. And so they can reply to service calls faster. or some other legitimate, 15% bounty-killing business reason

 

[jahilliard]

Yep. And I know how much my employees would jump for joy when I hand them the 1099 like paper work to add to their taxable income at the end of the year. At the beginning of this thread I was told to be careful not to loose a great employee...can't think of too many ways to loose that great employee faster than doing some minion action than that. Employees first, government last. but apparently I'm just a dumb ol' stingy employer that resents my fantastic employee. Hmmm...pumpin gas off the clock just doesn't seem so bad...UNLESS your motivated by tax law mandates, the IRS and government hand outs...I mean heck...lets just raise minimum wage to $50/hr! Yippee...yea maybe not so much. Personal responsibility barely exists anymore...and I was a little caught off guard by what appears to be a seasoned tradesman pushing the IRS and bounties over employees and their families. It's scary to take full responsibility of yourself...until you actually do it...and then you realize how scary it is not to! Well, that is, if your willing to put in all that hard work I see mentioned at the bottom of these posts...most aren't. The challenge is to see through the rules of society and become aware of what's truly going on. Stop doing what's easy boys, grow a pair, take responsibility and pump some gas on your own time so you can create some compensation for your family based upon your value and not your "time". Have the guts to look most of those around you in the eye and do what's MOST important, not easy. Get the chip off your shoulder thinking your boss is getting over on you because you put some gas in your truck on Sunday night. IT WILL ALWAYS WORK
OUT BETTER FOR YOU! I can't emphasize that enough. If there are any young up and coming tradesman reading this...I passionately hope you can see past the government and all the rules of society and become something special. It's the only way! THE ONLY WAY! On a lighter note...when I drive to my shop in the morning, it's a bit of a rush to run the red lights and stop signs because no one is on the road but me at 4:30. And I hear guys talk about how I'm always at the shop..."he lives here". And then...I take our whole family away for a week at Disney in our 2017 Travel Trailer that's paid for, and what do they say..."Must be nice to have the money to do that!" See what I'm saying?!

 

[ActionDave]

Yep. And I know how much my employees would jump for joy when I hand them the 1099 like paper work to add to their taxable income at the end of the year. At the beginning of this thread I was told to be careful not to loose a great employee...can't think of too many ways to loose that great employee faster than doing some minion action than that. Employees first, government last. but apparently I'm just a dumb ol' stingy employer that resents my fantastic employee. Hmmm...pumpin gas off the clock just doesn't seem so bad...UNLESS your motivated by tax law mandates, the IRS and government hand outs...I mean heck...lets just raise minimum wage to $50/hr! Yippee...yea maybe not so much. Personal responsibility barely exists anymore...and I was a little caught off guard by what appears to be a seasoned tradesman pushing the IRS and bounties over employees and their families. It's scary to take full responsibility of yourself...until you actually do it...and then you realize how scary it is not to! Well, that is, if your willing to put in all that hard work I see mentioned at the bottom of these posts...most aren't. The challenge is to see through the rules of society and become aware of what's truly going on. Stop doing what's easy boys, grow a pair, take responsibility and pump some gas on your own time so you can create some compensation for your family based upon your value and not your "time". Have the guts to look most of those around you in the eye and do what's MOST important, not easy. Get the chip off your shoulder thinking your boss is getting over on you because you put some gas in your truck on Sunday night. IT WILL ALWAYS WORK
OUT BETTER FOR YOU! I can't emphasize that enough. If there are any young up and coming tradesman reading this...I passionately hope you can see past the government and all the rules of society and become something special. It's the only way! THE ONLY WAY! On a lighter note...when I drive to my shop in the morning, it's a bit of a rush to run the red lights and stop signs because no one is on the road but me at 4:30. And I hear guys talk about how I'm always at the shop..."he lives here". And then...I take our whole family away for a week at Disney in our 2017 Travel Trailer that's paid for, and what do they say..."Must be nice to have the money to do that!" See what I'm saying?!

No, I can't. All I see are huge blobs of text that turn into a blur when I try to read them.

 

[gadfly56]

Ok so basically your employer did make an effort...but you're particular living arrangement kept you from reaping the benefits. That sucks. What does YMMV mean?

YMMV = Your Mileage May Vary

 

[__dan]

No, I can't. All I see are huge blobs of text that turn into a blur when I try to read them.

Try this.

Yep. And I know how much my employees would jump for joy when I hand them the 1099 like paper work to add to their taxable income at the end of the year.

At the beginning of this thread I was told to be careful not to loose a great employee...can't think of too many ways to loose that great employee faster than doing some minion action than that. Employees first, government last.

but apparently I'm just a dumb ol' stingy employer that resents my fantastic employee. Hmmm...pumpin gas off the clock just doesn't seem so bad...UNLESS your motivated by tax law mandates, the IRS and government hand outs...I mean heck...lets just raise minimum wage to $50/hr! Yippee...yea maybe not so much.

Personal responsibility barely exists anymore...and I was a little caught off guard by what appears to be a seasoned tradesman pushing the IRS and bounties over employees and their families. It's scary to take full responsibility of yourself...until you actually do it...and then you realize how scary it is not to! Well, that is, if your willing to put in all that hard work I see mentioned at the bottom of these posts...most aren't. The challenge is to see through the rules of society and become aware of what's truly going on. Stop doing what's easy boys, grow a pair, take responsibility and pump some gas on your own time so you can create some compensation for your family based upon your value and not your "time". Have the guts to look most of those around you in the eye and do what's MOST important, not easy. Get the chip off your shoulder thinking your boss is getting over on you because you put some gas in your truck on Sunday night. IT WILL ALWAYS WORK
OUT BETTER FOR YOU!

I can't emphasize that enough. If there are any young up and coming tradesman reading this...I passionately hope you can see past the government and all the rules of society and become something special. It's the only way! THE ONLY WAY!

On a lighter note...when I drive to my shop in the morning, it's a bit of a rush to run the red lights and stop signs because no one is on the road but me at 4:30. And I hear guys talk about how I'm always at the shop..."he lives here". And then...I take our whole family away for a week at Disney in our 2017 Travel Trailer that's paid for, and what do they say..."Must be nice to have the money to do that!" See what I'm saying?!

 

[cpinetree]

jahilliard,

Sounds like you have read Atlas Shrugged by Ayn Rand.

If you haven't you should, long book (buy or borrow from the library, the large print version, your eyes will appreciate it)

 

[Strathead]

Yep. And I know how much my employees would jump for joy when I hand them the 1099 like paper work to add to their taxable income at the end of the year. At the beginning of this thread I was told to be careful not to loose a great employee...can't think of too many ways to loose that great employee faster than doing some minion action than that. Employees first, government last. but apparently I'm just a dumb ol' stingy employer that resents my fantastic employee. Hmmm...pumpin gas off the clock just doesn't seem so bad...UNLESS your motivated by tax law mandates, the IRS and government hand outs...I mean heck...lets just raise minimum wage to $50/hr! Yippee...yea maybe not so much. Personal responsibility barely exists anymore...and I was a little caught off guard by what appears to be a seasoned tradesman pushing the IRS and bounties over employees and their families. It's scary to take full responsibility of yourself...until you actually do it...and then you realize how scary it is not to! Well, that is, if your willing to put in all that hard work I see mentioned at the bottom of these posts...most aren't. The challenge is to see through the rules of society and become aware of what's truly going on. Stop doing what's easy boys, grow a pair, take responsibility and pump some gas on your own time so you can create some compensation for your family based upon your value and not your "time". Have the guts to look most of those around you in the eye and do what's MOST important, not easy. Get the chip off your shoulder thinking your boss is getting over on you because you put some gas in your truck on Sunday night. IT WILL ALWAYS WORK
OUT BETTER FOR YOU! I can't emphasize that enough. If there are any young up and coming tradesman reading this...I passionately hope you can see past the government and all the rules of society and become something special. It's the only way! THE ONLY WAY! On a lighter note...when I drive to my shop in the morning, it's a bit of a rush to run the red lights and stop signs because no one is on the road but me at 4:30. And I hear guys talk about how I'm always at the shop..."he lives here". And then...I take our whole family away for a week at Disney in our 2017 Travel Trailer that's paid for, and what do they say..."Must be nice to have the money to do that!" See what I'm saying?!

For the record, I live my work life the way you wish people to. OTOH, I am VERY careful not to require those who work under me to do the same thing. I also am very careful about giving the impression that someone who does a little extra has preferential treatment. Why, because as much as you want to revile the government, their rules are the rules and those things above along with the IRS thing WILL bite you in the a$$. So don't set any rules based on that one employee. Set rules based on the average employee. Be very careful who knows what, if you choose to improve his life. Here is a promise. If you tell employees they have to pump gas on their own time, one of them is going to get mad at you one day. They are going to report you. You will be investigated. They will say you have to pay back pay for every time the person pumped gas. You will say, that you let them take the truck home. They will say, "do you 1099 that?" You will say, "No." They will fine you again and 1099 the guy who reported, you screwing him which should bring you joy, but also every other employee who works for you.

 

[jahilliard]

I appreciate the feed back on all counts..makes for great discussion, for the most part, and also it's a window to the rest of the trade...kinda. Your last post goes without saying! At least IMO. I know all that, I also assume most in my position already know all that. The day I bow down and and blindly do what I am told by the IRS is the day I had better become an employee. A motivator for me to be in business is to benefit from what an employee can not. There are tons of things that can be expensed that can benefit you AND your employees, that by IRS definition, shouldn't benefit anyone but the IRS. In short, I am not "expecting" any of these things I "want" to see happen. AGAIN, I believe we are all compensated based upon our Value. What I have mentioned creates more value. If an employee learns a skill, on his own time, it makes him more valuable and that skill is something that no one can take away...not even the IRS. If there is one thing I would hope that the newbies in this trade as well as the seasoned get from what I am saying is....bring more value!!! The IRS and labor lawyers are not out to help employees become something more than average...in fact I believe there intent is to make sure most stay oridinary and to believe they NEED the goverment. For those who truly desire to be more than average, read what I have written until you get it! If it takes doing some things on your own time to bring more value... DO IT!!! Stop looking for answers from the government or lawyers or your employer for that matter. You yourself are a Business. We are ALL self made...most of the time only those who are successful will admit that! At the begining of this thread I was attempting to find new ways to bring more value to our customers, in turn creating an opportunity for employees to bring more value wherever they may go, benefiting everyone invlolved. I still would REALLY like to hear more ideas about commision based incentives, etc. Pumping gas, and the like, on your own time is a choice to be made by the employee to bring more value, and don't think it will go unnoticed by a good employer! This turned out to be one heck of a thread!! And, it may be hard to believe this, but I do my best to look at all of these opinions objectively and how they apply to my situation to make us better even if I dont agree. Thanks to all whom had the guts to give their two cents!

 

[brantmacga]

Service Work Pay Opinions wanted!

I skipped over a lot of the replies, so someone could've already mentioned this ....... But here's my input from experience .......

Don't ever ask someone to work on their own time.

When I was working as a lead service tech, my pay was something like this ....

$15/hr base pay
After the first $1000 in profit above material costs, I got 10% of profit.

From $2000-$3000, I got %15

Above $4k I got 25%

Your tech will have to keep up with all material invoices. All invoices had itemized material list on back of the office copy of invoice.

Fuel and vehicle maintenance was not counted against profit.

I had a vehicle to drive home, a fuel card, company phone, and they paid for my uniform service.

We sold preferred service contracts for $90/yr or $190/ 3 yrs. I got half of that. The customer would get priority scheduling and a 15% discount.

I think I averaged about $6k per week in sales with an average of 25% material costs.

Some weeks I did $12-$15k in sales. The most I ever did was $18k in sales. There were instances where it was $20k, but half of that might be a small genset I sold or some other large expensive item, and usually rental equipment. If I needed a helper, I had to pay something like $25/hr out of my check for them. I would pick a guy up from the office when needed, then take them back after that call. The helpers would make around $13/hr. No skills necessary; just someone to bring me material or dig a trench. Weeks were I was pushing $15k in sales, I'd have at least 8-12 hours of a helper in there.

My boss was pretty lenient in that if I had another call close by and it would cost too much time to bring the guy back or my schedule just didn't allow time for it, they wouldn't charge me for the helper. Also, if we were slow and they just needed to give someone hours, they would send them with me and not charge me the hours. Also if I were training someone, I would not be charged those hours.

This is about the best I can remember, but pretty much my sales broke down to 25% material, 25% for me, and 50% for the office which covered their overhead and profit. I made dollars, they made dollars. It was a system that kept me extremely motivated. I would take a $200 call and turn it into a $500 call routinely; new smokes, lighting upgrades, adding GFCI's and AFCI's, surge protection, etc.... We had a lot of good repeat residential business and commercial maintenance. I developed my own relationships and sought out new business.


Edit to add..... If it were a call in town, within 20 minutes of the house, I clocked in when I got to the job. Longer than that and I was supposed to clock in when I left the house; I wanted to keep it fair, so I clocked in after the first 20 minutes of driving because that's how long it took me to get to the shop. If I were going to the shop first, I would clock in when I got there, and stay on the clock until the end of the day.

Another edit to add..... Time in the office finishing invoices or re-stocking material was on the clock.

Sent from my iPhone using Tapatalk

 

[Eastpoint]

I'd bet this discussion could go on forever!

We are all trying to tweek service work to create profit.

The one point missed in the discussion is that service work presents opportunity for building good will and trust with past and prospective customers. The biggest complaint by far that I get from customers is the lack of a call back. By being religious about returning every customer request for service, you will place yourself above most of your competition.

Most people first encounter an electrician for the first time because of an emergency or a project proposal.

We all love projects. They insure days, weeks or months of dedicated work hours. They are easy to schedule. The profits are predetermined.

Service work is notoriously unpredictable. Many service requests are poorly described or the solutions are not clear based on the trouble description.

Service calls allow us to shine in the eyes of a customer. It's like a dentist relieving a toothache. We show up in our red cape and get the A/C back on after several hours of 90+ degree heat. I have had many customers thank me profusely forsaving their dinner party, wedding reception, Thanksgiving holiday and on and on. Ever been hugged by a customer?

WHO DO YOU GUESS THESE CUSTOMERS CALL FOR THEIR PROJECT WORK.

Yup, ME!

I don't even have to bid. Just give them a reasonable estimate and the work is mine.

Not only that, these folks advertise the heck out of my business...for free!


One customer said in an online review "He's not the cheapest but, he's always there"

That's who I want to be.

There are loads of great ways to improve the profitability of service work throughout this discussion . Bottom line is that some unprofitable service work is an occupational hazard.

But don't discount the intangible benifits. A dependable citizen/contractor will bring lots of rewards to you and your employees.

 

[brantmacga]

You make a lot of good points Eastpoint. It's pretty common to hear "you're the only one that took my call" or I was the only one to show up. Communication and showing up when you say you will make a HUGE difference.


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[Weslondon]

http://ellenrohr.com/catalog/the-bare-bones-biz-plan/

spend the $10 for her downloadable worksheet and guide. do it this weekend.

Which plan is best, there's quite a few of them.

 

[GLSA]

How does pumping gas and cleaning your service truck on your own time create value? What is the OP willing to do for the employee in exchange for the employee creating "value" by working for free?

To me it sounds like the OP is disorganized and has scheduling problems and is trying to fix the wrong issues.

 

[JoeyD74]

We are a very small company and I have 1 Service Tech whom is very good at what he does, loves to be on his own, great with customers, etc. The challenge I am having is being able to produce what I believe we should be able to with our service work. For example he is currently paid hourly and what seems to be happening is he will start his hours when he leaves his house at 6:45, he will come by the shop and grab some small materials (screws, fittings, etc.), talk for a little while to me and the other guys about to head out to other projects...but his first appointment wont be until 8:30 so theres already almost two hours of unproductive labor. Also, there may be 1-2 Hour gap between appointments. An example would be a few days ago he turned in 7 hrs (from when he left his house to the time he pulled in his drive way) and there was only 3.5 Billable Hours. I am looking for possibly a commission based rate...something that would be an incentive to stock the vehicle, plan for projects etc. on his time so that he can produce as much as possoble throughout the day, in turn actually earning more for himself and the company.
This is the break down of the example.
Start 7AM
First appt start time 9AM End time: 11:15 = 2.25 Hrs
Dr's Appt from 1-2PM
Service call from 2:30-3 (1 Hour billable)
End the Day at 3PM
Total Pay Roll = 8 Hours - 1hr Dr Appt = 7hrs
Total Billable = 3.25

How is something like this typically handled as far as pay Roll Hours vs. Billable?? I understand every place can be different and all that...what have some of you experienced or currently experiencing that is or is not working for the employee as well as the company?

To me you need more service work for this guy. Is this a typical day for him where there is that much down time? Why is he going to the Dr during the day?
This is also why service work is billed out at a much higher rate than contract work, there is down time and travel time that need to be included in your service charge fee.
Traveling is part of service work and needs to be paid, no way around that so get more service work or what I do is I always have small jobs going on with 1 employee on it and I'm the service guy so my down time is on the other job working. One mistake I use to make was not charging enough for service calls and missing all the off job time that goes into a call.

 

[James L]

I've read the whole thread, and based on the timecard scenario laid out, it seems the OP isn't charging a dime to show up on a service call.

He said first call at 9:00 lasted til 11:15 there were 2.25 billable hours...? ? ?

Man, you have to charge an hour of time just to drive over. Then a minimum time at one-hour increments, then further increments no less than a half hour.

I did service work years ago and loved it. Customers loved it. Boss loved it.

I had to explain our rate once, and it was $65 to show up, $65 per hour, with one hour minimum and half-hour increments after that. I got this deer in the headlights look, so I said....

I charge $65 to ring your doorbell. If you open the door, I need another $65

That call at 9:00 to 11:15 should have had 3.5 billable hours instead of 2.25

And that 2:30-3:00 job was 2 billable hours

Start charging an hour to show up and you'll see yourself getting closer to 8 billable hours every day

 

[jahilliard]

Yes Sir, I have read the long version of Atlas Shrugged...I'm an Ayn Rand fan for sure. Check out the you tube videos of her owning Phil Donahue!! Pumping gas etc on your own time allows more time to actually produce more while on the clock, theoretically creating more value for you. I have implemented a few things this week in favor of "on the clock" time...Ex. We wash all vehicles as a company on Monday mornings. I haven't taken the time to look into everything because I thought this thread was dead by now...prob should be. I have listened to several of the Biz Plan pod casts...terrible audio but good info occasionally no doubt. I plan to look into the examples and info in the previous posts and see what might help us all out. Thank you!!