Is Anyone Using Flat Rate For Any Of Their Employees?

edwardbros

Me and a fellow contractor were talking about this method of pay. Is this a legal way to pay someone in the trades. I know auto repair shops do this all the time, With employees. His insurance agent told him that you can't do it. I tried looking on the web but, really doesn't say much for a trade like us.

CookeCarpentry

You mean having a salaried employee?

edwardbros

No per job,

Lets say they are putting up siding, you give them so much per square. They get it done fast they made more money, they are lazy and don't move that fast they make less.

Exmp. In a auto shop the tech gets paid $ 55 dollars to install a starter.
if it takes him a hour to install it he made $55 a hour. If it takes 2 hours then he made $27.50 a hour

CookeCarpentry

I'm sure you could do it, why would you want to?

What happens if they encounter something unforeseen in your initial estimate of the job?

What if they rush to get everything done as quickly as possible to make the most money? (thereby sacrificing quality).

NJ Brickie

You will most likely end up with sub par work but what you are talking about is called piece work.

edwardbros

I understand your concerns, You would only be able to do this with a good employee. As for un-foreseen items thats why there is change orders for the customer. Also in a flat rate scenario the employee should be able to do the the job right with quality and make some decent money.

The way I look at it would be giving the employee that bust his/her ass what they are really owed.

nlgutters

We do it and it is the best thing i have ever done. No more headaches. last week they made $35 an hour with no problems.

I have yet to have a problem with quality on this system. They are makeing $35 an hour they want their job.

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edwardbros

Ok, Piece work is also another name for it. With the understanding with the employee if they understand if they do crap work they won't last long, and that you'll be inspecting it, I feel it would be goodfor both parties.

I don't understand why my buddies Insurance Agent had a hissy fit when he brought it up.

Also if anyone is doing this method is there any items you have to do special with your workers comp and Unemployment Insurance?

Just wondering, I have an employee that I would like to try this with, he's a good worker and would like to give him more for the work he does.

edwardbros

nlgutters,

If you don't mind does this screw up your workmans comp. at all.?
How did you fgure what you pay in?

TBFGhost

Go for it. I used to do flat rate work...but I also used to be able to nego my hours for a job, boss would say x, I would say z, we usally met at y.

SLSTech

You can do it BUT, you must make sure they make more than minimum wage & if they work over 40 hours than the minimum wage & regular overtime

Make sure you talk to your accountant first though

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BamBamm5144

It is easy to make sure they do it correctly. Tell them if something is wrong they have to go fix it and are not getting paid to do it again. I used to get paid a percentage of the job. Certain jobs I would make 50 plus an hour. One job it came out to be 73 an hour. Another job it was 14 an hour. I made a lot more money this way then straight hourly even when it was not that much an hour. Also, at this time I was exempt from workers comp or having to have any insurances paid on top of my rate. With all the hacks and drug addicts and no shows in my industry, it is important to come up with a creative pay schedule.

Also, there has been no complaints about not getting paid to go back and fix anything they may do wrong. When the argument did start, the owner simply said, "We dont get paid to go back and fix your mistakes so why would I go pay someone else to fix something that you already did wrong?"

apehangeralfy

If they go over 40 hours they get 1.5 time there rate... averaged out for the first 40. Be careful to document hours, they still need to fill out there time card.

I have seen the system abused by an ex-employer there he set the rate at 15 per square and when you got your check it had your hours rate listed as $7 per hour... so you ended up looking like you worked 80 hours per week... totally illegal. It hid comp rates, taxes and unemployment insurance... He never got caught but I remember going for a loan and handing them my pay-stub, with $8 an hour but bringing home over $600 and got some strange looks.

Also, if a guy lays 16 square a day piece working and only did 7 a day on the clock.... we would have a problem!!!!

Framer53

The problem is that plan is illegal for an employee, and the state wage board loves open and shut cases.
Minimum wage and min +half for overtime must be guarenteed.

You can't ask an employee to fix something without being paid.
2 things that are flat wrong.


It is a good way to budget jobs, but can create a lot of paperwork. For wxample, in framing, how do you divide up the pay? Cut man, wallbuilder layout man, how do you pay each piece work when so much of the job is based on teamwork.

Gutters or siding can more easily divided into piece work, in fact if I was hiring workers for either trade I would offer it to them.

BamBamm5144

Yes but I dont do framing and when I was paid that way I was exempt from all those. When it is piecework it is simple and of course it does equal out to minimum wage. Your type of work is much different.

Are you saying that employees should be paid to do things twice? Lets say I have someone go to do a chimney repair, and a week later it still leaks. I send them to do it again. Now they just got paid twice for the job that I got paid for once. Truthfully, I have yet to have to send anyone back to fix anything since they were told about this the beginning of the year. I guess the thought of it made them be a little more careful and take a little extra time. Would I pay them to go back? Of course. Do they know that? Not yet.

Framer53

What makes the job exempt? Only thing I could think of is if you were a sub.

BamBamm5144

I was considered an "officer" of the company. Signed a paper saying that I know I don't have workmans comp and so fourth. Its confusing and to be honest, I am not even sure how it works but I am still considered an employee of the company. All I know is that I sign that paper.

edwardbros

so if you hurt your self on the job your fd, right? Or do you have to carry some type of your own insurance?

edwardbros

As far hitting Min. state wage and time and a half that shouldn't be a problem. Unless they take 80 hours to do a job. But if takes them that long they won't have a job anyway.

So If got this right one would. Take what they earned in that week, run the normal taxes on it and work comp $ unemployment. and send them there check?

nlgutters

It dosent affect me at all. U are still under the same classifaction. If anything its cheaper for you if they get more done for the same money

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