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Sub-pay

Discussion in 'Commercial Snow Removal' started by slade, Nov 14, 2007.

  1. slade

    slade Senior Member
    Messages: 142

    Do any of you guys pay your guys by the lot instead of by the hour. I have a guy that might be working for me this winter and I was thinking about paying him by the lot. What do you guys think would be a fair percentage? Say I have a lot that $100 what would be a fair price to pay your sub to do it. He has his own equipment a cat 246b skidsteer with 10' pusher. I want it to work for both of us. The advantage for him would be that he could possibly make more than if I paid him by the hour. He would be rewarded for getting the lot done quicker instead of making more the longer it takes(if he is getting paid by the hour). The advantage for me would be that I would know what my labor costs are going to be. What do you think.
     
  2. PM/FF

    PM/FF Junior Member
    Messages: 19

    If you don't pay by the hour he may get it done quicker, but think about this: Quicker means that you take more chances. What I mean is, your more likely to make a mistake, back into someone or something and cause damage to the truck or property or worse, injure someone or yourself. Then you gotta pay to fix whatever or whoever (personal injury) you crashed into, liability expenses and, if its bad enough, that truck could by out of commission. Encourage speed, but not at the expense of safety. Pay by the hour, IMO.
     
  3. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,046

    A good operator pretty much goes the same speed all the time, so I wouldn't worry about causing more damage. I've done it both ways and the only problem I have found with paying by the job is cutting corners. Make sure you both agree on exactly where the snow is all to be piled and so on. The split would be somewhere around 50 to 70% depending on the extra's for the lot.
     
  4. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,592

  5. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    if he works AWAY from you on his own i would pay by the job (lot). just have an understanding what specifiaclly needs done and have it in writing how much he will get paid.
     
  6. hickslawns

    hickslawns Senior Member
    Messages: 619

    Snofarmer nailed it. Key is he is your sub-contractor, not employee. Get a quote from him on the job, or shoot him how much you will pay. Keep a copy of his insurance and make sure you get an invoice from him. That way you are not his employer. You have to protect both your interests. Pay him fair. Let him know expectations up front. Make sure he meets expectations. It is critical you dictate up front this is a black and white deal. I pay you "X" amount to have this lot cleared by 730am within 15 days of billing. You know what you make. He knows what he makes. He clears it to your satisfaction. Who cares how long it takes him. If he is a true sub-contractor and there is an accident, then he is liable. This should be enough to make him cautious. If I ever had a question whether my sub was careful or wreckless they would not work for me. No room for wreckless.
     
  7. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609

    yeah.. your not allowed to pay a sub by the hour. thats how you pay employees.
     
  8. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    legally you can pay a sub by the hour.. I get paid by the hour on jobs and i'm not an employee
     
  9. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,592

    No, you nailed it...;)

    And the IRS :waving:
     
  10. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 8,592

    How the business pays the worker. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is usually paid by a flat fee for the job. However, it is common in some professions, such as law, to pay independent contractors hourly.
    source,http://www.irs.gov/publications/p15a/ar02.html#d0e602

    not to say you are or are not only you and your employer knows.
     
  11. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    agreed....... our accountant somewhat basis it on IF a "person" has set hours also. i have one guy i pay by the hour. he does the same duties as my employees but he only works when we are in a bind and need him and he is available. usually about 200-300 hours per year.