Helper Problems...

[rusty baker]

In Mo, you legally have to pay workman's comp on an hourly employee, but paying a percentage, they become a partner and you are no longer responsible. As least that is what my bookie, I mean bookkeeper told me.

[The Carpetologist]

Been crunching numbers...

How does 20% sound after gas and supply's?
Last week, my gross was 2700 with 125 in gas and 300 in supply's.
My current helper making 10.00 per hour got 36 hours. (he took a day off for court
At 20% he would make 455.00
IMHO, that is WAY to much for this guy....
Friday, while I was doing that very hard carpet with seaming and stretching challenges, he spent most of the day just pulling off the carpet and pad off the steps
and putting pad on them. Very difficult carpet, but I installed and upholstered the steps faster then he took them off.

At 15% he would make 337.50 which is a little less then he made last week.
I am thinking that is about where he needs to be.

If I hire another guy, and start him also at 15% it would leave me 60 percent of the job which last week would have been 1365....
Not very much for 30 years experience and doing all the work!

It sounds to me like I should go back to just installing vinyl... don't need any help for that!

[Demonseed]

Every state is different, if I wanted a full time helper in NJ and worked out of a store I would have to have workmens comp for them, at least in North Jersey. In CT no one ever asked about WC, $10 an hour is not bad, when you factor in they are learning a trade, although I personally never had good luck with a full time helper, no matter how well I paid them. The last time I tried a FT helper, first week was great, he showed up on time everyday, worked hard, and we were both happy. Week 2, he needed me to pick him up or he was late, had to leave early, would disappear on the job, etc. Week 3: He forgot how to use a phone, didn't show up or call, but sure remembered how to call me when he wanted to get paid...

The percentage thing, people can try to use that to avoid a WC claim, but in the long run it would never hold up if they sued you, they would have to be a partner, otherwise aside from all the soft shoe, they will be considered an employee.

In the long run, if you find a reliable helper who is willing to learn they should be able to increase your production within a month or so, the first month will even out (what they do will probably equal the amount of time you have to train them to make them useful).

[mcurrin]

When I installed I paid my good dependable trained helpers 30 per cent, but that was after they had proven themselves. I also carried WC on them, here in TX it is not much money for the coverage you get. Also gas and supplies are not your only overhead, try WC, general liability ins., truck payment, advertising, etc. (this was a mistake I made)

Mike

[Kman]

You might consider sort of a bonus when you finish a good job that pays you well. Forty or fifty bucks may not sound like much, but to someone that's making only $80-120 a day, that 's a decent bonus. I used to do that, as well.

You can decide for yourself based on the kind of helper you have whether or not you want to tell them about the bonus before or after the job is finished. If you have the kind of helper that will rush through the job just to get the bonus and not care about quality, you may want to wait until the job is over. Then you can explain that since the job was done to your satisfaction and finished early, you're giving a bonus. Explain that it won't happen on every job, but will happen on occasion when things go well. That could be the incentive for the helper to do better and faster work in hopes of receiving a bonus, but you're not obligated every time to provide it.

The bonus doesn't have to be the same every time, and I didn't bother with the percentage idea. It locks you into a certain amount no matter what. If something goes wrong and you don't make as much as you hoped, you could end up making very little or no money at all. But when you have a job that pays you well, you can make up for it by giving a larger bonus.

I did this on a job in my own subdivision a couple of years ago. There was a house that need about 300 feet of tile and 500 feet of wood. I told my helpers that I would pay them $17 an hour for their work, and $20 an hour if we finished the same day. It took us from 6AM to 9PM, but we finished all but grouting the tile. I don't remember the exact amount I made on the job, but I remember thinking I didn't have to do anything the rest of the week. I got paid well, the help got paid well, and everybody was happy.

Something else to keep in mind: If you're giving your help a 10-99 for the year and he files taxes (like he's supposed to) he's probably losing 40% or more to taxes. So $10 an hour might only bring him six or so after taxes.

[rusty baker]

I guess i was spoiled by my first helper/partner. He could, strip, pad, stretch, trim and do stairs. He couldn't go on his own because he could not figure a job or lay it out. He made a third of the gross. and i paid all expenses. He quit after 9 years, to get into somthing else. I got tired of trying to teach young guys, who were not interested in doing it right.

[Daris Mulkin]

Also if you are 1099 him and it don't fit the proper criteria and he turns you in it is going to cost you big time. I've been there done that.

Daris

[The Carpetologist]

OK, so now I need to take a step back...
Find out about how the law works here and go from there.
Talked to the kid who just graduated from high school...sounds promising.
Lives less than a mile from the shop and wants to learn a trade.
Meeting with him tomorrow.

Going for 2 helpers now... we will see....

[Nick Arrera]

I will take one good mech over two helpers any day ..

[Kman]

In order to 1099 someone, they basically have to be a private contractor. Most of them don't want this, since they lose so much in taxes....unless they aren't even filing taxes, in which case that's definitely what they'll want.....unless like Daris said, they turn you in and you definitely don't want that.

Your helper might meet that criteria if you, for instance, have him go in before you and install tack strips and pad, or if he cleans up after you. Pretty much any particular section of the job that you turn him loose on and he's responsible for the job and you have no immediate direction over him other than telling him how you want it done and giving it a final inspection.

If he's down there on the floor with you and you two are doing the same job, and you're paying him an hourly rate, he's an employee, not a sub. Make sure you have the paperwork to cover yourself if he's a sub, like maybe an estimate, and for sure a bill from him to you to show what he did and how much you paid him. The feds will look at all of that if you're ever audited and have to try to prove he fit the criteria for a 1099.

[Dobby Tappet]

If your paying helpers straight pay with a 1099 at years end, you are setting yourself up for a heap of big legal troubles on both the state and federal levels. If your going to hire an employee, do it right and for goodness sakes, do it in compliance with state and federal guidelines.

Do you have any idea the legal mess you are going to find yourself in if slow Sammy incurs a work related injury that prevents him from working or otherwise impairs his ability to earn a living?

Do you have any idea how your insurance carrier is going to react in the event of a property claim that involves a second sub-contractor? Oh, that's OK, I'm sure your 1099 sub contracted helper carries his own business liability insurance. So you probably shouldn't worry about this.

Do you have any idea what is going to happen when slow Sammy decides to file for unemployment compensation?

Do you have any idea what is going to happen in three years when Slow Sammy is sitting across the table from a Revenue Officer contesting the lien the IRS has placed on his assets for unpaid taxes and him explaining why the taxes we're not properly withheld when he was clearly and without a doubt working for you as an employee? BTW: It is the IRS who defines who an employee is, not us and their guidelines are really very clear and helpers are most certainly employees!

Following the same event, do you know the IRS can and will assess massive penalties, plus interest, for not only the money due, but also for 940's and 941's you failed to file. Are you also aware that failure to report and file employee withholdings is viewed as a criminal not civil matter? What this means is, when you receive the certified letter detailing the thousands of dollars you owe for improperly filing a 1099 and failure to with hold and file file the necessary 940 & 941's you will have about thirty days to pay the amount 'in full' before they move your account to the Criminal Investigations department and those folks play some serious hard ball.

If your going to hire an employee, do it right and for goodness sakes, do it in compliance with state and federal guidelines.

Listen, this is not a personal attack or an attempt to give you a hard time. In fact, quite the opposite. Chris, you are a fellow floor pro and I know I speak for everyone here when I say, we are all here to help one another and when someone asks a serious question, we care enough about them and our trade to give them the honest straight forward reply they deserve and have every tight to expect. Even if the truthful reply may not be exactly the information they were hoping for.

With sincere regards,

Dobby

[Peter Kodner]

I have been reading this thread with great interest and Chris has mad eclear some of the difficulties I only vaguely knew existed for the independent installer, in particular, the ones who want to perform their craft ethically.

Having had a Union shop, much of what is being discussed here was already determined by the collective bargaining agreement we were signatories to, i.e. wage levels, insurance, termination procedures.

Several have mentioned the legalities of withholding requirements and insurance both liability and workman's compensation. Sage advice which will preclude some very painful and expensive lessons.

I do think the pay structure the Union dictated to us may be helpful in set up a compensation schedule for you helper candidate.
1st year 40% mechanics wage
2nd year 60% mechanics wage
3rd year 75% mechanics wage
4th year 90% mechanics wage

You may want to include a probationary period of 3-6 months where he is paid 10-15 per hour so you can get a good idea of his work ethics. start his "training" after that period.

If you are serious about eventually making a partner out of this man, a long range agreement, with very specific goals of what work they must be capable of performing and a clear idea of the earning potential, will accomplish a lot for you. First, you will weed out the ones who are just tire kicking and have no intent of making a career with you.

You have not discussed tools yet. Are you prepared to get him a basic kit to begin with? Won't cost much and will also give him some ownership of what he is doing. Very disheartening to have to go to your tool kit every time he needs a tool!

Most of all, I would like to say moving forward with this will require patience you probably don't know you have. You will need to spend less productive time teaching and will assuredly be fixing work not done right on sites. A?Short term, you production will suffer but long term your income will improve.

Good luck with whatever you decide on how to proceed!

[getoverit]

Boy does this thread ever bring back some memories!! More bad ones then good.
When I learned the trade I was a union apprentice. I got three raises a year for the first 4 years of the program. 2 incentive raises a year and one cost of living. Your employer could protest the raise if he felt you weren't upholding your end. I also had a pension plan and health benefits including dental.I had good incentive to learn this trade and work hard at it.
After a little over 14 years union I moved to a right to work state. (florida) They don't even have union shops here so I had to learn how to run my business. I started working out of the stores, soon discovered that was a joke and started my own small installation company. For most of the time I always had a right hand man. Maybe not quite as skilled as me but I was never afraid to leave him alone on the job. He was compensated very well. He had a truck to drive and whatever tools he needed were there and he made about $25 an hour. then there was usually 2 helpers. The reason for 2 is that usually someone's not going to show up at least once a week. With 3 working for you, you can cover the job and not kill yourself. the one complaint I hear about helpers is that you train them how to do the job right and then they go out on their own and you have to start over training again.
My helpers did this too. One of them owns his own store in the Carolinas now. Graashopper surpassed his teacher! what I discovered was the fact that I trained them worked in my favor. I used them as subs. I knew their work and could still make money off them. My general helpers I would start at $12. an hour with the promise of a raise in a month and a review in 3 months. Maybe 1 out of 5 lasted 3 months. I had one guy last about 4 years, another was with me for 11 and a couple assorted ones around 3 years each. the good helpers end up making at least $15 an hour with bonus's. Sometimes the bonus was a half day off with pay. Sometimes open bar after work. If they made me money then they made part of it. Take care of your help.
Oh yeah, Don't forget about how many times they're going to be calling telling you how their wife left them last night (again!) they forgot that they had a doctors appt. The car won't start. they got S**tfaced and can't get up. they need an advance on their pay so they can pay their rent (again!) They've got court.....and on and on and.......................Good Luck Chris!

[Darren Ramey]

I admit, I have always 1099'd my help. I don't know any other way to do it. I am a carpet installer, not a suit. I don't know a thing about how to take out taxes and set up benefits and all that stuff. If I am going to have to go to business school to be legal, I sure the hell aint gonna stay in this business. I shouldn't have to jump through hoops to be a damn grunt. I loved being an employee last year. I didn't have a thing to worry about other than doing my job. They were the only shop in the area that did things legal. Shame the extra overhead from being legal ran them out of business.

I have always payed my help either a fixed amount per day or a percentage to a couple of good ones. How does one pay a helper by the hour in this business? Some days I only work one or two, it wouldn't pay for a helpers gas to show up. At the moment, I am mostly working solo and just grabbing a guy here and there when I need them for furniture.

[Daris Mulkin]

Well after my helper turned me in, I became legal as the driven snow. Come to find out it didn't end up costing me as much as I thought it would. Paid the taxes, insurances the whole works. Guess what ? I even could sleep better at night. But every time a envelope arrived that had the IRS on it i cringed. But usually it was in time for my 1/4's which I very promptly paid. It also pays to have a bookeeper that you can take things you don't understand to.
I even incorporated my business, to protect my personal assets if something went wrong.
Luckily after the kid turned me in the state didn't persue me for anything.
Oh incidently, if you or anyone has this happen they only go back 3 years, UNLESS, they think you willfully frauded them and then it can go back to day 1.

Daris