Employees or subcontractors.

This has been discussed here quite abit before. Not trying to stir any pot and don't have a view to say. I have a question to see if there is any change in the workforce or a tendency to change: More in house employees, less in house employees, more subs - less employees, more employees, less subs, all sub.

I gatheres from this site in the past many praised themselves for in house employees, which figured in more quality control. And the other side of the coin. Only subcontract to insured companies, no employee problems such as WC claims.

How does the health care issue disversify each business plan?

I ain't been here awhile. I like it cause I can use words such as aint. If you hear me there is a little squeek at the beginning of aint.

Be checking back.

Thanks much.

just my 2¢:

1) Where I am it is legally impossible to assign away your right to workers comp. This assumes of course, that you are a de facto employee.

2) As JSC pointed out, where we are you cannot be an independent contractor without a state contractors license. That takes out most of the discussion for him, me and anyone else in Ca.

3) The feds also have a number of criteria that must be met to qualify as an independent. Any one of these criterion will take out most people on its own.

4) As lanny points out, most audits will either take you out or make you pick up the tab and liability later on.

5) As many have alluded to, it will likely be on your own conscience if you talk an unsophisticated dupe into entering into an illusory independent relationship. Maybe not, but probably.

6) As for Blue's standard, which bases its strength on the pillar of manhood and personal responsibility, if it is legal and is between consenting adults none of whom are too crippled to understand what is playing out, how could we be against that?

OK smart guys, here's what you have to look forward to..... Maximum profit and minimum overhead and tax issues...... then you get to be around 55-60, and you go around where your from and all your buddies in the same boat, underinsured, and possibly dehabilitated, unemployed and minimal assistance, standing in line in soup kitchens and food pantries, bobbing and weaving and believing that your not deserving and worse, you enabled a community of citizens that have nothing to fall back on......your underground industry at the other end of the road has produced a bunch of individuals with no benefits, social security, insurance and retirement. Maybe you have your health and you can work until your 70.....but you could have listened.... built a business to pass on instead of a legacy that your ashamed of.... ya, your the guy that that hobo over there used to work for before he fell one day...one of your subs that you beat the insurance and he's sh*t out of luck. you want to justify your underground business because you paid a smart lawyer to get around it, and your a fat cat...go hide with the SOB's.....your not welcome in the business world...your a plague...driving the prices down or worse, slowing down the real worth and growth of our industry. How can you jeopardize the future of your employees family's stability with your fast talking loophole ducking arguments...Don't skirt the rules and guidelines, improve them.....you'll sleep a lot better knowing that your associates are taken care of instead of tossing and turning with guilt over knowing that your underhanded business decisions drove another man into poverty and destitution. Trust me it happens, more so than you'll ever know ... never mind admit to being part of. OK enough here...hockey games on.

How many have this problem of too much cash ? Can you admit it if you do? If it is a problem how do you deal with it . On a trip to Italy THE LOVELY MRS CIAK visited a relative in Sicily . In a B O Socialist type system many people take government jobs hang their coats on the chair and have a business around the corner .This is just a part of the problems we are starting to face here with illegals . This is what The Lovely Mrs Ciak found all over Europe especially Italy and Sicily . Anyone who voted for B O should fess up and repent if you don't shame on you for destroying the last bastion of freedom in the world . If B O can destroy this nation he hates there is no where else to run . We are in the fight for the lives of our children and grand children.

How many have the problem of too much cash ? If it is a problem how do you deal with it . On a trip to Italy THE LOVELY MRS CIAK

quote/]lanny Said: ---Around here the illegal sub game eventually gets exposed by an audit. An L&I audit will expose it as will an IRS audit. My insurance company raises my rates if I use subs. I cannot 1099 anyone who is not legit without it leaving a paper trail to an audit. ---That is why I am tired by the illegal alien argument that, Without illegals the economy would suffer... Or Illegals do work that Americans will not... Or The price of everything would go up without Illegal aliens... Or illegals pay taxes...why shouldn't they receive services... ---As I see it illegal workers are KILLING the economy by undercutting legitimate contractors. Just look at the line up outside Lowes or Home Depot. They work for cash under the table, do NOT pay taxes many times and send much of what they make out of the country. I have to bid against companies that throw 8 Hispanics on a roof and I KNOW they are not paying them what I pay nor are they paying taxes on all that employee wages. ---They pay $8-12/hour cash. I have seen as many as 10 Hispanics on one roof. It looked like a convention. Legitmate contractors cannot compete with the low overhead. Lanny

Lanny and others that have to deal with the illegals.

Up here in Ohio I don't see Illegal's as the main problem of low balling at all. What I have seen is the use of 1099 contractors (Employees posing) as the problem. We have one local company that tells everyone that they have employees, yet you talk to one of these so call employees and they will tell you they are a 1099 contractor. This is the problem with this industry! Nobody wants to pay their portion of taxes and the legitimate contractor suffers. We just have to out smart them with the homeowner by giving them the information to make a good decision. You can't compete with the low baller, if you do you get mixed up with wanting to slash your pricing structure and not making your overhead. Don't even put yourself in that bracket! Keep doing what we (Legit) contractors do. It'll take 8 NO's before you might get 2 Yes's. However, if you make your overhead in those 2 yes's then does it matter that 8 American family's chose to hire an illegal or illigitimate company? That's the great thing about America, it's their choice.

Here's what I have found to work this year. Man Day=$200.00 Overhead= + Sales Commision + 10% for Pure Profit.

Pay the men $160 per man Day Pay the companies portion of the taxes, workers compensation, Fica with the $40.00 per man day Tax this employee Employee is paid piece work! Employee gets company truck, compressor, main big ticket items. Signs for these items, makes sure they are in good working order and pays for the repairs. All general maintenance on the items including truck are paid for by company. All repairs due to neglect are taken from the next job payout. Employees are making 17-28 per hour, each and everyday since we started this. We figured we never wanted to Sub, but we wanted to control our cost on each job. This way, they want to take an hr for lunch, it's their dime. However, everyday we need to make our overhead. This also drives us to complete each job in the timeframe that was set by the estimator.

I don't mind good subs that get paid enough to pay their portion of the tax burden. However, in our area you can't find a decent Sub that's willing to do that. I am sure there out there working for a company that is all paper. I like telling our homeowners that we have health insurance, workers compensation, offer a group discount with aflac, a simple IRA plan for our guys, vacation time, and they get to collect unemployment if that time comes. Homeowners are educated on what we do and why we are better than the guy using only subs. Once you educate a homeowner they usually don't mind paying a little bit more for those types of professional workers. You know, the ones that actually give a crap about their workmanship, their quality, the ones that say we are Professional Roofers and this is my career! Yes, that's the ones I am talking about, The Professional Roofer. Not many subs I know can actually step up and say those words without lying to themselves and others.

Seems, the subs in our area are the ones that are driving the price structure down. We have sever hail storm damage in our area. The out of town guys are charging $450.00 per Square, I am around $325.00 AVG per square 2 layer ranch. The guy that always subs out, has the most work, has the most subs, signs, etc. is only charging $225.00 per square. He actually cut the subs pay by $5.00 per square this year and told the subs that it's the economy. Yup, my guys are happy with the way they get paid. It's a tough sell sometimes, but well worth it if someone gets hurt!

Subs VS Employees I guess it depends on how much torture you want to take on your family if a guy gets seriously hurt on your jobsite just one time.

Jeff

And he is in hog heaven that day anyway. 12 hours of work, sore back and knees, a helper he has to pay out of the proceeds, and truck to put gas and oil in and pay the insurance on and no WC or FICA. Quite a deal!

The example of my nephew and his friends' woes is just the most recent version of the same story. Most involve roofers. It's about a very common way to get above being the $20. per hour employee. You're offered to be a sub. You assume the risk of avoiding wc coverage, you lose the security of unemployment as a backup, you get all your money with nothing witheld. In some states those two alone can add $12 per hour. Add in FICA and employer matched contributions to the wc, unemployment and the portion of the liability insurance based on payroll. Payroll costs for the $20 per hour guy are in the mid $30's at least.

My guess is most roofing subs aren't getting much more than that. Alot of guys can take that money saved by assuming the risk and use it as a springboard to becoming legit. My uneducated guess is it's less than a third of all people that can do it. The rest are the guys that pay attention to the Taxmasters and Ronnie Deutch commercials. They definitely are missing out on the current extended benefits gravytrain going on now that the $20 per hour guy has.

As to the money the cable guys get, their jobs are within a 40 mile radius, which means there could 50-60 miles between jobs, all city and suburb. They might be getting them from a chain store scattered across the area. Could you do two repairs, one 2 hour, one 2 1/2 hour, 30 minutes travel to the first, an hour between the two, 40 minutes returning. You've spent over $40 in gas. Can you do those two repairs for $240?

I do repairs pretty cheap compared to some I've heard on here, but I'd need at least $440 to do repairs as I described.

wywoody Said:

jimAKAblue Said:

wywoody Said: I have a nephew that lives in my area. Hes an installer for cable and sattellite tv. Its an industry that very much uses subs. He gets from $120 to $150 per install. they supply their own truck, tools and gas. Most jobs can be done in 1 1/2 to 3 hours. Theoretically, you could do four in a day and make a pretty good living. Like piece-work roofers, if you ask them how much they make, they would cite the one day when they actually did four as if they did it every day. But the truth is, most days they can only get two done. Yet they develop a mindset that theyre doing 3 or 4 a day and tend to spend accordingly. Ive met a number of his installer friends and the one thing they all have in common is they all are being hounded by the IRS for back taxes. My nephew is in a hole hell probably never get out of BECAUSE he had a few good years.

I think its cruel and irresponsible to put people incapable of being independant in that role just to save the labor overhead that legit companies have.

Let me get this straight: You think it is cruel for your nephew to earn 50 to 75 per hour drilling a few holes and setting a sat dish up? And your solution is to pay him an hourly wage...maybe $15 per hour?

What ever happened to the notion of personal responsibility?

I subbed as an independent contractor since 1982. I quickly figured out that I could keep a legit set of books and the government provided me with significant legit tax savings because of all the business deductions. I paid my tax bill, just like I paid my phone bill.

Lets not toss the baby out with the bath water just because people like your nephew were irresponsible. They made their own bed....

Well, good for you, Stephen. My nephew has the ILLUSION of making $50 to $75 per hour. The reality after travel time/expenses is far less. He would be much better off if he were working for $20 per hour in a company truck. I also continue to think that its unconsionable to have someone doing hazardous work for you and not provide workmans comp coverage for them.

Okay, I accept the amended claim. Now, we are talking about the nephew earning "only" $300 per day for two installations.

I'll re-ask the same question: what happened to the idea of personal responsibility? He's grossing $1500 per week for a job that essentially requires him to have a truck (or van), ladder, drill and a few hand tools. Quite frankly, I'm having a hard time feeling sorry for him if he neglected his IRS payments.

There is no illusion here. He took he money and he has responsibilities. Lets not change the IRS code because your nephew, and his ilk, are tax dodgers. All of us here have probably been 1099'd at one time or another and we paid our taxes eh?

Also, I don't agree at all that he would be better off earning $20 per hour. That just sounds like bad math to me.

You're right stephen, my response wasn't aimed at you. Probably not even jim. Sometimes I just have to tell myself "I know which way's up."

Hey woody, don't drag me into this- i think your response is aimed at jim- not stephen.

stephen

I know of at least one significant roofing contractor here who is calling his employees subcontractors.

I found this out while trying to garnish the wages of one of my former employees who left owing me money and went to work for him. When the collection agency called the contractor's phone number, this employee answered the phone and told them he didn't work there :laugh: Later, the collector was told by the contractor that this employee was a subcontractor and not an employee. I had to explain to the collection agent that it was not legally possible in California for anyone to be a subcontractor unless they had a valid contractor's license (which he didn't).

I finally got the money owed (less the collection agency's cut), but it's still sticking in my craw and I'm thinking about turning the contractor in to the IRS.

jimAKAblue Said:

wywoody Said: I have a nephew that lives in my area. Hes an installer for cable and sattellite tv. Its an industry that very much uses subs. He gets from $120 to $150 per install. they supply their own truck, tools and gas. Most jobs can be done in 1 1/2 to 3 hours. Theoretically, you could do four in a day and make a pretty good living. Like piece-work roofers, if you ask them how much they make, they would cite the one day when they actually did four as if they did it every day. But the truth is, most days they can only get two done. Yet they develop a mindset that theyre doing 3 or 4 a day and tend to spend accordingly. Ive met a number of his installer friends and the one thing they all have in common is they all are being hounded by the IRS for back taxes. My nephew is in a hole hell probably never get out of BECAUSE he had a few good years.

I think its cruel and irresponsible to put people incapable of being independant in that role just to save the labor overhead that legit companies have.

Let me get this straight: You think it is cruel for your nephew to earn 50 to 75 per hour drilling a few holes and setting a sat dish up? And your solution is to pay him an hourly wage...maybe $15 per hour?

What ever happened to the notion of personal responsibility?

I subbed as an independent contractor since 1982. I quickly figured out that I could keep a legit set of books and the government provided me with significant legit tax savings because of all the business deductions. I paid my tax bill, just like I paid my phone bill.

Lets not toss the baby out with the bath water just because people like your nephew were irresponsible. They made their own bed....

Well, good for you, Stephen. My nephew has the ILLUSION of making $50 to $75 per hour. The reality after travel time/expenses is far less. He would be much better off if he were working for $20 per hour in a company truck. I also continue to think that it's unconsionable to have someone doing hazardous work for you and not provide workmans comp coverage for them.

wywoody Said: I have a nephew that lives in my area. Hes an installer for cable and sattellite tv. Its an industry that very much uses subs. He gets from $120 to $150 per install. they supply their own truck, tools and gas. Most jobs can be done in 1 1/2 to 3 hours. Theoretically, you could do four in a day and make a pretty good living. Like piece-work roofers, if you ask them how much they make, they would cite the one day when they actually did four as if they did it every day. But the truth is, most days they can only get two done. Yet they develop a mindset that theyre doing 3 or 4 a day and tend to spend accordingly. Ive met a number of his installer friends and the one thing they all have in common is they all are being hounded by the IRS for back taxes. My nephew is in a hole hell probably never get out of BECAUSE he had a few good years.

I think its cruel and irresponsible to put people incapable of being independant in that role just to save the labor overhead that legit companies have.

Let me get this straight: You think it is cruel for your nephew to earn 50 to 75 per hour drilling a few holes and setting a sat dish up? And your solution is to pay him an hourly wage...maybe $15 per hour?

What ever happened to the notion of personal responsibility?

I subbed as an independent contractor since 1982. I quickly figured out that I could keep a legit set of books and the government provided me with significant legit tax savings because of all the business deductions. I paid my tax bill, just like I paid my phone bill.

Lets not toss the baby out with the bath water just because people like your nephew were irresponsible. They made their own bed....

I have a nephew that lives in my area. He's an installer for cable and sattellite tv. It's an industry that very much uses subs. He gets from $120 to $150 per install. they supply their own truck, tools and gas. Most jobs can be done in 1 1/2 to 3 hours. Theoretically, you could do four in a day and make a pretty good living. Like piece-work roofers, if you ask them how much they make, they would cite the one day when they actually did four as if they did it every day. But the truth is, most days they can only get two done. Yet they develop a mindset that they're doing 3 or 4 a day and tend to spend accordingly. I've met a number of his installer friends and the one thing they all have in common is they all are being hounded by the IRS for back taxes. My nephew is in a hole he'll probably never get out of BECAUSE he had a few good years.

I think it's cruel and irresponsible to put people incapable of being independant in that role just to save the labor overhead that legit companies have.