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I have never thought to much about this until recently. I have been in business for three years and for the most part work alone except for a part time guy and the occasional helper here and there. I have always paid my helpers $10/hr. Usually the helpers are just paid cash because they only work a few days every couple months. My part time guy has been working with me off and on since before I went out on my own and he is pretty skilled. He is at the place where I can trust him to work by himself and know he is going to do good work. I bumped him up to $11/hr last year when he started working a regular 3 days a week during the school year. I have been giving him a 1099 up to this point.
Now my business is taking off and I've got lots of work coming in. He is working full time now and has asked me if a raise is a possibility. The nice thing is he has also asked how he can improve his work or if there is more responsibility he needs to take on.

What are your thoughts on this. I want to reward his work and keep him working for me. I don't want to lose him and have to train another guy as it would take years to get a newbie to his level. At the same time I want to be cautious about giving raises while the business is just starting to take off.
 

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I'm The BOSS
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1099 = HIS OWN BUSINESS= his own liability insurance,
and that the illegal way, he's your employee.



what about workers comp. I'm guessing NO.



Sorry , but, I can't stand the halfway, halfa:censored::censored: businesses around my area.
 

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Talking Head
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Stevarino, you need to either start paying all the taxes and insurance on this guy or run him through a temp agency and let them handle it for you. You're in for a shock because he's going to cost you about $17 an hour. 1099'ing him is really bad, he's barely making any money and then he's responsible for an extra 15.3% off the top. He probably hasn't been filing correctly and doesn't know what's going on.

As for the raises, here's my view. I figure 3% for inflation(it's been 2% lately but that will change) and go from there. If you give someone an inflation raise then they're basically not getting any more spending money than they got last year. An employee who isn't living up to standards might get no raise and a warning, an average employee who isn't really improving gets 3% and an improving or above average employee gets more.

If you're ever going to take on more employees then you should standardize this to also include promotions, e.g. laborer, helper, journeyman, lead, etc.. You need to offer more pay at promotion time or people aren't going to be happy.
 

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i cant imagine someone working in construction for long at $11 an hour...i hired an unskilled guy recently and started him out at $15....he's just a part time laborer....basically someone to dig and carry my tools...

id use this good income time to raise your prices enough to hire this guy properly....make him an employee and pay him $15 an hour.....give him a yearly raise
 

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11 is low in my opinion, even for down here. Its hot or cold and the work is hard. I havent kept a good laborer for more than a month at less than 13, thats no skills and I provide tools.
 

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I dont have a raise schedule. Everyone is different. One of my carpenters came it in at 13 and was making 18 in a year, he already had some skills, they improved.

I have a "master " labe at 15 who has been at 15 for 2 years...... only way he will get more is cost of living probably...
 

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Accidental Painter
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$10/hr isnt bad here. Our cost of living is low. Hell, if your making $15/hr you must be rich, haha...different regions of the country pay differently.

Give him $1/year pay raise with a set ceiling. Then also add vacation time.
 

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President
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As for the raises, here's my view. I figure 3% for inflation(it's been 2% lately but that will change) and go from there. If you give someone an inflation raise then they're basically not getting any more spending money than they got last year. An employee who isn't living up to standards might get no raise and a warning, an average employee who isn't really improving gets 3% and an improving or above average employee gets more.

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:blink::blink: Have you been paying attention to things, such as gasoline? Rent? gas/electricity prices, FOOD... ect ect...

2% inflation? what are you stoned?! :laughing:
 

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How could a "Helper" EVER be legally a 1099 subcontractor????

First IRS test, 1099 worker must determine HOURS and Methods of their work.....

Reality, meet me at the job @ 7:00a.m. Be early, I'm bringing everything you need.

Do you allow the 1099 'helper' determine how he/she works??? really?
Self starter and $11.00/'hr gross, Wow, send me his resume. Even a dead guy can make money doing a ignorant young worker out thousands of dollars of future SSI pension funds and farming out his workman's comp liability.... do your customers know they are the hook for the kid's workmen's comp claims?????? I'm sure he is self insured with < 20K$ of annual income.

Second chapter of reality, you owe back taxes and payroll taxes on the "helper" you've been screwing....

An honest person would go to an accountant and find out what you owe the helper and the governments, and various payroll deducts(workmen's comp, unenployment, and Fed unemployement, SSI, and Medicare/aide....
You proablely will just let the sucker go before he wises up and files with the DOL and revenue services, and hope the statute of limits run outs---oops there isn't any statute of limits on Tax fraud.......

If you get legal, does your business model make a profit still? If no, why not quit before incarceration?
 

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my part time $15 an hour guy costs me around $18 an hour after taxes/insurance

if your guy it part time id make him a normal employee and not 1099....its a couple of bucks
 

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Talking Head
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:blink::blink: Have you been paying attention to things, such as gasoline? Rent? gas/electricity prices, FOOD... ect ect...

2% inflation? what are you stoned?! :laughing:
Inflation isn't determined by anecdotal evidence.

Here's one link but you can do a quick search and find a couple hundred more to show that I'm not cherry picking the data.

http://www.usinflationcalculator.com/inflation/current-inflation-rates/

For what it's worth, it may seem like things are getting more expensive, quickly, but they've been flat for the past few years and almost everything that you mentioned is the same as it was in 2008. The recession caused prices to plummet and they've just built up to where they were. Wages have been keeping pace with the costs so inflation is low.
 

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:blink::blink: Have you been paying attention to things, such as gasoline? Rent? gas/electricity prices, FOOD... ect ect...

2% inflation? what are you stoned?! :laughing:
Some things have very volatile prices and skyrocket, other things plummet, inflation is an average.
 
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