Is Anyone Using Flat Rate For Any Of Their Employees?

Kgmz

What do mean by "considered"?

Were you a officer or not. Are you registered with the state as a officer of the company, do you have substantial control of the company, and do your primary duties not include manual labor. These questions all have to be answered with a yes to be considered exempt.

Patrick

How is it illegal to make them go back? The installer just made $40 an hour doing a half days work, something is screwed up and he has to go back for an hour on his time. He still made way more than minimum wage Its not that they aren't getting paid for it, its that they aren't getting paid anymore for it. of course if he botched the whole job and the repairs took longer than the original work you may have to kick in to meet minimum wage

__________________
Originally Posted by Celtic
Like I said...I'm sure you are very good at what you do ~ whatever that is and where ever it happens.

nlgutters

ON comission based pay you do not have to pay time and a half

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www.nlseamlessgutters.com

Anti-wingnut

BINGO!


I don't think working off the clock is ever legal

But comission based pay is sales. Installing gutters is not sales

BamBamm5144

The answer is yes. If it wasnt I wouldnt have said I am considered (according to the state) exempt.

bwalley

That piece of paper will be nice when you get hurt, it will show they are breaking the law, you are either and officer of the company or you are an employee.

Do you do anything in your capacity as an Officer or is it just a title?

BamBamm5144

What do you mean by do anything? If you mean handle paperwork, estimating, oversee jobsights, budgets, communicate with customers, handle employee issues such as hiring and firing and things like that then yes. My manual labor is only when guys dont show up or on side jobs. If that is breaking the law then I will figure out a way to change it but as I said, I havent looked into it that much.

I guess when I said I am employee I mean that I am not self-employed. I did not know that being labeled an officer of the company makes me a non-employee since I still get paid by the company.

TempestV

Why would he be off the clock if he goes back to fix something?
Say the guy in question manages to do $400 worth of work in a 10 hour day, so he makes $40 an hour. If he screwed something up the first day and has to spend another 10 hour day fixing it, now he has 20 hours into that $400, so he is making $20 an hour instead of $40. If it takes him another 40 hours to fix his mistake (50 hours for the job), and all in one week, then he would get over time. If minimum wage is $8 an hour, he has to get at least $320 for the regular week, and another $120 for the day of overtime, for a total of $440. I have seen some piece work or commission jobs advertised that read %commission or $10 an hour, or something like that. The employee makes at least $10 an hour standard pay, but if the commission is worth more, then they get that. I've seen others that read $10 an hour + commission, with the commission not bringing in as much. With construction, I would guess that the second would be better. If a job is dragging on and the employee doesn't see themselves making enough to get paid on piece work, there isn't the incentive to work harder. Also, if a project happens to break on the end of the week, it would make for all sorts of confusion about what percent of the project was done, ect. With the second method, you pay them for their hours plus whatever projects they got done. They get reimbursed for the half done projects next week, when they are done.

Framer53

He has to be on the clock. If you take him off the clock to fix mistakes, you are going to run into problems with the Dept of Labor, if he reports you.
Hey, I didn't write the law.
Check with your attorney as there are different state laws.

Framer53

But if they work more than 40 hours a week, ther comission must be larger than time and 1/2.
It is complicated, best check with your lawyer if you feel this might come into play.

Only reason I know about is that I worked comm. for a company that ran into problems with this. As sales manager, I was responsible to make sure that none of the salesmen had this problem!

Framer53

It gets very complicated. I always found it easier to just pay my guys an hourly and a bonus if they excelled!!

kevjob

I thought the IRS clearly states rules for sub vs employee, BTW The IRS is looking for offenders really hard this year so I would contact them to make sure you aren't going to be violated by them come tax time.So I have heard.

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Kevin
Basement Finishing Highlands Ranch Colorado
Littleton Colorado, Basement Remodeling
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Kgmz

Here is the standard wording for WC exemption.

1. A sole proprietor or partner of a business.

2. Members of a limited liability company (LLC) if they manage the company (and there are no managers), or managers of a LLC who are also members and who exercise substantial control in the daily management of the company. Only eight managers may be exempted unless all managers are related by blood within the third degree of marriage.

3. Corporate officers of a public corporation are exempt if they meet the following criteria:

a. A bona fide corporate officer who also is on the board of directors and a shareholder, being elected according to the corporation’s bylaws and articles of incorporation, and

b. Has the substantial control in daily management of the corporation, and

c. Primary duties do not include manual labor.


4. Non-public corporations may exempt up to eight, regardless of the performance of manual labor, if they are bona fide officers, have substantial control in daily management of the corporation and are a shareholder. However, any number may be exempt if they are all related by blood within the third degree of marriage, and are bona fide officers.





Something I forgot to make clear, besides being a officer you also have to own a share of it.

A operations manager is not going to cut it. You must be something like a Vice President, etc. and also own shares of the corp, or be a partner/member of a LLC.

gorenx

When I was in florida, I worked for an aluminum contractor. The owner/president of the company structured pay by the following method:

Piece meal rates of $.65, $.70 and $.75 per square foot based upon experience and if he liked you well enough. Square footage was based off of two side walls, the back wall, and the area of the roof. For example, say you just built a 20'x40' screen room around some one's swimming pool with 8' walls for a total of 1440 sq ft.

You were either being paid $936, $1008, or $1080. Now whatever rate you got would be split with your partner depending upon what agreement you made with him (most were a 50/50 but one jerk I worked with insisted on him getting 60 and I got 40) and then, you had to deduct your helper's pay from your pay.

Helpers were paid at a starting rate of either $75 per day, $85 per day, $100 per day and maxed at $120 per day. A standard crew consisted of four guys (two partners and two helpers). An experienced crew could knock out a 20'x40' pool enclosure in a 12 hour day while a typical crew would spend two 10 hour days on it.

So here is the break down for an experienced crew: Piece meal @ $.75 x 1440 square feet = $1080. $1080 - one helper @ $120 per day = $960. $960 - one helper at $85 per day = $875. $875 - $525 for your partners 60% split = $350 for you.

$350/12= almost $30 an hour for yourself.

The owner of this company would pay "helpers" through a payroll leasing company. This covered workers comp and liability for them and eased things for the owner. However, "Crew Leaders" as he called them, were paid by a company check and 1099'ed at the end of the year.

Was it legal? I doubt it. His reasoning wa this was the way ALL of the aluminum contractors in florida did it. But by giving the crew leaders a 1099 at the end of the year meant he did not have to pay huge ammounts to the payroll leasing company which took a percentage of the total payroll as their fee thus reducing his costs.

The downside of this system is this and I know because I lived it: 20X40 square jobs (cake jobs) were few and far between. Cut up messes with every upright and beam on the back wall cut at a compound angle were the norm. They took more time and were typically just a little bit bigger than a cake job.

My "partner" got frustrated at one cut up mess after we had been there for three days and pulled the crew from the job to move on to another job that proved to be an even bigger mess than the one we had walked away from. So here it is late thursday afternoon and he pulls the crew from the second job. We pack everything up and he says to me, "we need to go lay out a couple of cake jobs and get them cut tonight so we can stand a chance to get paid this week." I said sure and off we went, we measured one job and then another, and then back to the shop and we started cutting out both jobs, packaged them up and put them on the trailer for in the morning. We busted our backsides friday and saturday to get two jobs completed just so we could pay our helpers. So now we owe the company for two helpers for 6 days of work, both at $85 per day totalling $1020 and we just made $3600 but because the office was closed on saturday and we did not get the second check into the bank on time, the second job was added to the following week so here was payroll for that week:
Helper 1: $510
Helper 2: $510
My "partner": $72
Me: $48

Hours I worked that week: Monday 12, Tues 11, Wed 12, Thur 18, Fri 12, Sat 13 for a total of 78 hours. I worked that week for $.62 an hour. After that week I quickly found another partner.

edwardbros

Interesting, But I don't think I would make it that difficult for the guy.

The key to flat work should be a reward for the worker to excell, not make them feel worried about getting paid.

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John

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XanadooLTD

i would say to loose your guys as employees and make them sub contractors. Even less headaches for you and no issues with comp, taxes on your end, etc.

Framer53

That would be fine, except the feds and the states are cracking down on these type of arrangements.
I have read that even some legitimate subs are being caught up.
Like I said, easier and probably more legal, to treat them as employees and pay them an hourly rate.

ARI001

Federal laws prohibit employees from assuming a loss of any kind. This is why you can not send them out to fix anything they screw up with out compensating them for that time, or penalize them if they damage your equipment, etc. If additional work is necessary, equipment is damaged, the property is compromised, etc, it will be on your dime. You must also be sure they make the federal minimum wage and overtime rate when applicable. You would be well advised to run this by your accountant and attorney so you are aware of your rights and liabilities before proceeding.

XanadooLTD

Im not saying to do anything but use those guys as subs and give them piece work. There is nothing wrong with that at all. They are then sub contractors and responsible for their own taxes, etc.

ARI001

You can do that but then they become businesses and the rates they charge will go up. I don't know about you Xanadoodle but I bid jobs for what I can do them for plus make a profit and don't generally bother with people that want to tell me what the job should or will pay (unless it is more than I would charge anyway ). Ultimately you will most likely end up paying them more as they will have incurred additional expenses. The plus side to that is it will reduce paperwork and overhead costs for the OP. The downside is it will reduce the amount of control the OP has over those aspects of the job that are sub-contracted out. The Op must weigh the differences and decide which method would benefit his/her company the most.