Paying employee's more and they pay for supplies, gas, etc. - Cleaning Talk - Professional Cleaning and Restoration Forum
 
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post #1 of Old 06-23-2013, 08:53 PM Thread Starter
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Paying employee's more and they pay for supplies, gas, etc.

Do any of you pay employee's a higher rate and let them just pay for there own supplies and gas to and from jobs etc. For example, instead of paying someone around 10 dollars an hour and providing them with the supplies and a gas allowance, you would pay someone around 15 dollars an hour and just have them purchase their own supplies and pay for most things themselves. It seems this would save alot of stress on the owner's end of things and would help control costs pretty well knowing you just have to pay a flat rate to someone per job.

I know that paying someone the higher route way is not the most common thing I see on here, just was wondering if anyone has had success doing it and could shed some light on the situation. Thank you for any replies in advance.
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post #2 of Old 06-27-2013, 08:36 AM
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How are you ensuring that the supplies they purchase are up to your standards?

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post #3 of Old 08-16-2013, 05:17 PM
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Originally Posted by Maids a la Mode View Post
How are you ensuring that the supplies they purchase are up to your standards?
I agree with you.
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post #4 of Old 03-24-2014, 12:38 AM
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I think you need to check with your local employment laws and see how that flies in your particular state. If you have employees you have to take into account MSDS documentation regarding cleaning supplies your company uses and meeting OSHA regulations.
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post #5 of Old 03-26-2014, 12:12 PM
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Sounds like that would make them more like contractors rather than employees. Look into labour laws in your area.
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post #6 of Old 03-26-2014, 04:24 PM
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Employees do not supply their own cleaning chemicals for jobs
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post #7 of Old 03-29-2014, 02:04 PM
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What you described is a sub contractor. If most employees were smart they would flock at the opportunity to do this. This is not to be mean, this is just business, but the reason most employees don't flock at this opportunity is because they can't use a calculator. The reason I LOVE working with a calculator is because it has no letters on it, only numbers. So it all boils down to.... they make little money and most stay broke and in debt.

I have always offered this to everyone that has worked for me no matter what business it was in. So far no one has followed through with it. I've been in business for myself since 1995 so that is a lot of years and a lot of people that can't find their way around a calculator.
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post #8 of Old 03-29-2014, 02:49 PM
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Giving a so called employee the option to be paid gross wages can get both the cleaning company owner and the employee into tax troubles-
However that may be the least of your problems as if this individual that you have given a 1099 to should get injured while in your employ and they have no insurance,you company owner are on the hook both legally and financially for their medical treatment.
If you want this subcontractor relationship-then the employee needs to be licensed and insured just as you are,in short they have their own cleaning company and they are subcontracting off of you.Anything short of that and you are violating some tax law and there's the insurance factor...
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post #9 of Old 03-31-2014, 06:00 PM
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That is 100% correct Lorster. I bet 95% of the people out there don't understand they can't just give Jo Blow a 1099 and call them a sub contractor. ALL sub contractors must actually be a business, and have a business name or a DBA.
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post #10 of Old 03-31-2014, 06:43 PM
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Sprintcar93
Finally someone else out there who will tell the startups the truth (even if they don't want to hear it)

Young companies,startups if you will.
You are going to have multitudes of so called competitors who are cheating the system,either the tax system or the insurance system.
However, if you want to sleep at night,do not want to get sued by the federal govt or some huge nasty insurance company that will take everything from you,maybe even your home.
Pay your employees legally,pay your taxes,don't lie to the insurance company,period.
You have enough to do without having to worry about junk.
I was legal and I made great money.

http://cleaningbizsecrets.weebly.com
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post #11 of Old 04-01-2014, 08:42 AM
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Good information Sprintcar and Lorster! I was looking into using the 1099 but now I am shying away from this option due to your posts. That being said, I know plenty of large companies and smaller companies that 1099 their employees...

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post #12 of Old 04-01-2014, 10:55 AM
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A1 Cleaning Tech-if you want to try to keep your pricing structure firmed up-seek out very small window cleaning and residential cleaning companies who will work for you for a firm price.Just check and make sure they have insurance VERIFY IT!.Insist that they provide you with and insurance certificate for both their general liability and Workmens comp.If you are in the US I would also request that they list you as an additional insured on the insurance certificate (talk to your insurance company they can explain).
And last but not least-make them sign an agreement that they will not solicit your customers, in short a non compete agreement.
Small companies can be helpful when you are short handed.Just check the license and insurance.Also keep a copy as you will need it for your year end audits...
In my state their insurance levels must match your own-talk to your insurance agent.In other words if you have 500k of general liability then they must have the same limits.Just ask...

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post #13 of Old 09-26-2014, 11:46 AM Thread Starter
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I wanted to update this thread. I am in now right in the thick of things with my business and things are going ok but wanted to address the independent contractor situation. I was pretty scared starting out possibly with independent contractors because I did not know how my business would evolve and what to to expect and how things would go, but as time goes on, all the indications point to me running a business that is much more like an independent contractor model vs. an employee model. I opted for the employee model first with all of the bells and whistles that comes with it.

I have an assistant who is 1099 and calls come in to her, she then dispatches the calls the local cleaners in my area, who drive their own cars and use their owns supplies for the job. They are free to accept or decline each job and have complete control over there schedule. Right now I am paying the girls 13/h and they are very happy with that, the problem is that for every hour they work, I have to pay 7 dollars an hour for worker's comp, and that does not even include all of the their taxes and money to pay for the office assistant and marketing etc. I try to keep it my pricing at 30/h but at this rate that I am going maybe I see 3,4, dollars an hour off of the jobs if I am lucky. That is not what I envisioned when starting my company.

I have access to good accounting firm and lawyers who I can discuss my situation with and most likely will be moving to an independent contractor model soon based on just how I am running my business. I actually have been an independent contractor for a company for 7 seven years since graduating college so I have decent grasp on how that model operates. I just think the more and more I look at how my business is currently operating, it is much more like an independent contractor model and I think I am shooting my self in the foot by still paying the cleaners a pretty decent wage and still paying for all of the other things like worker's comp etc. If i was paying them like 8-9 hour maybe I could sustain the worker's comp, but I am paying them high because they are doing everything by themselves.

I might actually increase their pay to 14 or 15 an hour most likely if I go the independent contractor route.

I just wanted to see if anyone could provide an advice in this situation, is currently running a business with independent contractors and maybe could point me in the right direction of some good forms to use or links/websites or people I could talk to that would help like a consultant possibly.

The other thing I wanted to mention is please do not bash this thread or this post. We are all here to learn and make money and grow our businesses and I am just trying to get some help and advice and see if people could point me in the right direction of some good forms or people I could talk to that would be knowledgeable about the situation I am in. I am fully aware of the contractor getting injured on the job situation and believe me that is not something I take lightly and if I did choose the independent contractor route I would have to be very careful and put in important language in the contractor reflecting this situation. As I mentioned before as well that I have been a contractor for 7 seven years and I know fully well the risks that are involved and that if something happens on my end I am screwed or could potentially be screwed but I make decent money doing the job and are glad to have the opportunity to have the job so that is kind of the trade off.
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post #14 of Old 10-11-2014, 10:36 AM
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I'm in the process of looking to hire my first employee and I'm currently weighing the options between hourly or a IC. The one thing that kills it for me on the hourly is the workers comp insurance. Here in CA it's outrageous and from the information I've gathered so far, to hire ONE person will mean me giving up roughly half of my current income. I expected to lose a bit of my own income when hiring someone, but HALF? Is this the norm?

As for hiring an IC, the thing that kills it for me on that is I can be liable if they get injured on the job - which will financially devastate me and my family. Can I have a legally binding contract written up protecting me from being held liable for injury or is this not possible?

What about paying them a percentage of the job? What percentage is normally used and how does this work? Are they still paid as an hourly (meaning workers comp, ins, etc) or as an IC? I know nothing about how this works and I'm intrigued by it....

I've been in business for and by myself since 1994, but I am rather new to the cleaning business. I've always done fine solo, but hiring employees is totally new to me. I am blown away at how difficult financially it is to grow your business, especially here in CA where the state motto is instead of "I'll be seeing you" is actually "I'll be suing you". :(

I could sure use some advice. I am at the point where I am nearly maxed out with customers and can't grow on my own since there is only one of me. I see all kinds of untapped potential in my little town as it is hard to get outside businesses who want to make the drive up here. I would hire local.

So, it's either stay where I am and turn business away/stagnate - or bite the bullet and take the risk of hiring someone to help out.

Last edited by NunJoBizness; 10-11-2014 at 10:44 AM.
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