employees

Who here, as an independant contractor has an employee or employees? Do you pay them by the car or the hour?

Our subs get paid by the car.

Bud has posted cautions about IRS rules on who qualifies as an independent contractor...

I'd like to note that detailers ought to get fair pay. If they are paid a salary, they are better able to compare their pay to that offered elsewhere. A salary allows them to plan their expenditures better.

To offer good pay, you must gross enough. A man I know paid $400 to have an average sedan detailed last week, so someone must be making money. If you look at inflation, $400 is reasonable, BTW.

Doug

Doug thanks for mentioning my cautions about independent contractors and detailing.

I have research this with the IRS and more importanly with the Dept of Labor and what detailers do and how they pay people is DOES NOT QUALIFY for an independent contractor status.

Please consider it makes absolutely no difference to me whether you pay salaries or independent contractor, I only caution you that if you are caught by the Dept of Labor moreso than the IRS you are in a world of hurt.

I will say it again, a few years back Federal legislation was enacted (don't recall the name) where workers gave up the right to sue an employer for a work related injury in exchange for Workers Compensation Insurance. There are huge benefits for an employee who is injured on the job having Workers Comp Insurance vs having to sue an employer.

In any case, the Labor Dept of every state does not look favorably on employers who try to skirt this law with a feeble attempt at independent contractor status.

The fine if you are caught can be as high as $25,000 plus $1,000 a day for every day you had employees with no Workers Compensation Insurance.

And any violation is retroactive. That is, say Danny Detailer gets injured at your shop and you tell him, don't tell the hospital that it happened here at work, (they always ask when someone comes in with an injury) tell them it happened at your house and I will pay the bills for you.

So you pay the medical bills, all is well. Wrong.

Danny leaves you and 6 months later he is having a few beers with his buddies and they notice he is limping they ask why. "Oh, I slipped and sprained my ankle at work, and it has never been the same since."

They ask him if he is getting Workers Comp coverage on the on-going injury and he says no.

They then explain to him his rights, that his employer should have had insurance and since he did not Danny can report his boss to the Dept of Labor and they will take care of him.

He does and you are in big trouble. Fines, medical bills, compensation for Danny, etc.

I know personally a situation where this happened to a detail business owner.

Bottomline, you need to find out what the IRS and the Dept of Labor consider an independent contractor and I can tell you it is not what detailers do with the people who work for them.

Just some well intentioned suggestion. Take what you like and leave the rest or none.

Bud Abraham
DETAIL PLUS SYSTEMS

Listen to Bud, everyone!
When I was still working, we had a subsidery operation, with a low of 20 employees to a high of 60.
This was for new car prep for dealers and a few details.
We paid a salary with raises based on performance and bonuses based on performance.
Taxes were paid, work comp was paid, and we offered an insurance plan that was joint contribution.
Follow the laws, don't even try to cheat or it will come back and bite you one day or another.
Grumpyl

Not trying to cheat the law here, I am a state licenced independant contractor, We carry our own insurance amoung other stipulations to meet state requirements for workers comphensation exemption. The question is, as independant contractors, does anyone else employ subcontractors with exemptions? We are considering hiring our first employee and I will pay comp insurance for them. How much do you pay yours? Im thinking $50.00/car, plus comp and supplies. Realistic?

buda Wrote:
-------------------------------------------------------
> >
> I have research this with the IRS and more
> importanly with the Dept of Labor and what
> detailers do and how they pay people is DOES NOT
> QUALIFY for an independent contractor status.
>
> > > Bottomline, you need to find out what the IRS and
> the Dept of Labor consider an independent
> contractor and I can tell you it is not what
> detailers do with the people who work for them.
>
>______________________________________________________

Bud - I feel your comment above is somewhat of a inaccurate blanket statement towards not only the people reading this thread, but to the industry in general. In restrospect, my business has successfully operated using the help of sub-contractors for several decades now and I have yet to have any problems with this arrangement. I, as well as the current owner of the business, have both been consulted by our Attorney & CPA and they are all on the same page in respect to operating within the law by having these types of workforce classification in our business. I can also tell you that the current owner was also recently been audited by the IRS(unrelated issue) and he was not flagged/fined for anything related to these concerns above (which I'm told were discussed). My Attorney actually specializes in working with the United States House of Representatives and the White House’s federal departments and agencies and is very grounded with small business operations. I sincerly trust that the instructions I've been given are accurate and within the law as he is very familiar with the operations of my business.

I'm not saying that the utilization of sub-contractors is the only or best way to run the workforce side of a detail business, but it is a good way with how my business is structured. I.E. High Volume Dealer Reconditioning. Making sure you understand the basic parameters of the law and having your sub-contractors properly set up is essential for long term success. I wish more detailing businesses would consider this form of classification as the financial advantages are worthwhile for the little bit of extra work it takes to set each person up.

Respectfully -
David Fermani

I work at a detail shop in Temecula Ca, what are your thoughts and what should me and my coworkers do? We have a waterless way of washing cars which for $20 could take 2 guys an average of 45 mins on a midsize car (1 guy inside vac n windows, 1 guy outside wash n rims = both take 45mins to finish, double time if 1 guy has to do it alone) and we each get written up for 30mins a piece = $4 each guy. But on an SUV or big truck (Suburban, Ford F-250) it takes longer! And we get paid same price as a mini cooper! Is that fair?!? On to full details (2hrs inside + shampoo carpets/ 2hrs outside + wax) which takes 2 guys a total of 2hrs (2hrs each) and we get paid a grand total of (drumroll please) $8 @$&?!& dollars!!!... And you know the funniest part of this story.. The Boss put up a poster of the minimum wage law on our storage door ( covering more than half the door!!) all of us had a rough past and know how hard it is to just leave or snitch on him ( we wouldn't know where to start) so how do we get him to pay fairly without getting fired or him finding out?!

David

All I am saying is that you need to know the IRS and Dept of Labor laws with regard to indepdendent contractors.

I did not say that ALL detailers are violating the law with regard to independent contractors, I said MOST. And I will challenge you on this, MOST are violating either the IRS or Dept of Labor regulations.

Plus if you pay a person by the car you have to insure that they make on a daily basis a pay equal to minimum wage if they work say 8 hours and in the State of Oregon the minimum wage is $8.50 per hour they have to be paid minimum $68.

If they are an independent contractor you have little control over what they do. The most legitimate independent contractors I know are beauticians who rent a chair from the shop and have their own clients and basically can come and go as they wish.

Bud Abraham