Where the problems come in are, that paying someone
peice rate does NOT NEGATE the requirement to pay overtime for
Employees.
Nor does it Negate the IRS's definition of what an
EMployee is and a contractor is.
You have to restrict employees to work less than 40
hours or prepair to pay time and a half for your peice rate. If an
employee works 60 hours, and completes three installs at in that week, at a
peice rate of $100 each you would pay the employee.....
$300 / 60 hours = $5 per hour. Overtime (20
hours) would be paid on $100 of the pay. Addtional over time pay
(half time) would be $50.
Total paycheck would be $350.
If it took them 60 hours to just get two installs
done, they would be less than the minimum wage.
So there are two requirements....
1) You must have a minimum pay, calcuated on
the total number of hours that THEY record working.
2) Must figure out someones average hourly
rate on a weekly basis. This complicates the accounting duties, and forces the
account to custom pay each employee each month.
Two problems that can occur are...
What if you want to pay an employee well, because
they are really doing a good job, and then one week they decide to go really
slow? You end up paying someone a huge amount of overtime
unexpectedly!
What we learned was that a employee's record
of stated hours worked was accurate. So paying peice rate does NOT NEGATE
the need of the management to record and manage the hours worked by an
employee. We learned, that an Employer is NOT responsible for their
productivity the employer is. So if they go to the movies all day
without you knowing it, and work late to get the job done, you still owe
them the overtime, regardless of what flat peice rate you
negotiated.
These are some of the reasons that we chose to put
employees on Salary instead of Piece rate. We live in a sue happy county.
We just plan on everyone taking way to long for an install, and put very low
expectations on what they are expected to accomplish, and we save
on management and accounting salaries. If they get done early,
we have them do other things. I won't talk about what happens if they
don't get their work done, thats handled on a case by case basis. So we
chose salary for ease. IF they consistently do well, they get a higher
salary and stock options. It creates a team effort, not a what do I get
mentality.
I don't know if that is the right decission or not,
it really takes our guys a long time to get things done. I often consider
whether I should migrate back to peice rate.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless
Broadband
----- Original Message -----
Sent: Saturday, September 23, 2006 9:10
AM
Subject: Re: [WISPA] Outsourced
installations
According to the DOL (department
of Labor) an employee can be paid by the hour or for piece work (by the
job)
from http://www.dol.gov/compliance/guide/minwage.htm
The Act requires employers of covered
employees who are not otherwise exempt to pay these employees a minimum wage
of not less than $5.15 an hour as of September 1, 1997. Youths under 20 years
of age may be paid a minimum wage of not less than $4.25 an hour during the
first 90 consecutive calendar days of employment with an employer. Employers
may not displace any employee to hire someone at the youth minimum
wage.
Employers may pay employees on a
piece‑rate basis, as long as they receive at least the equivalent of the
required minimum hourly wage rate. Employers of tipped employees (i.e., those
who customarily and regularly receive more than $30 a month in tips) may
consider such tips as part of their wages, but employers must pay a direct
wage of at least $2.13 per hour if they claim a tip credit. They must also
meet certain other conditions.
I suppose that if
these guys manage to spend over 20 (10 hrs each) hrs on every install for the
pay period, then I would have to adjust their pay to bring them up to minimum
wage. That hasn't been a problem. They average about 3 hrs/install including
drive time. This is about twice as fast as installs got done back when they
were paid hourly. This is a win/win/win solution as I see it. The employees
like the method for making extra money. The customers like the techs getting
in and out in a reasonable time. I like getting 2 or 3 installs/day vs 1/day
like we got back when techs got paid per hour.
We treat their install
pay just like regular income. We withhold the withholdings, deal with the
social security, etc.
Lincoln Welder mfg company in Ohio pays EVERY
employee piece-wage only. You might get $4/ea to wind motors, $2/ea to install
a switch, $7/ea to screw wheels on, $1.50 to inspect parts, etc.
They have
withholdings, pay social security, etc. They even clock in/out, to insure to
OSHA that no employee is working more than 120 hrs/week but this method has
been in place for years and works very well. The employees love it and the
unions hate it. It insures that the new guy in training gets up to speed
in a reasonable time or washes out. The guy who has been there for 10 years
can handle 10 $4 units/hr can make decent money.
Pete
Davis
NoDial.net
Scott Reed wrote:
You
might want to check with your accountant. I doubt the IRS is going to
let you "contract" with people you also employ. You may be liable for
FICA, etc. for all the installs they have done.
Scott Reed
Owner
NewWays
Wireless Networking
Network Design, Installation and
Administration
www.nwwnet.net
---------- Original Message
-----------
From: Pete Davis <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED], WISPA
General List <wireless@wispa.org>
Sent:
Fri, 22 Sep 2006 07:40:09 -0500
Subject: Re: [WISPA] Outsourced
installations
> We outsource most of our installs to our
employees. The two techs usually go out together, and split the $100. Its
not unheard of for my techs to make more money on a busy week than I take in
my salary, and I am an owner.
>
> They make $x/hr to do
service calls, uninstalls, AP maintenance, etc and if they can keep those
caught up, we schedule an install (usually 1 or 2 /day for 2 techs). They
are OFF the clock for installs, and get $100/install. We provide the van,
the tools, the gas, the CPE, and all consumables (staples, caulk, cat5,
ends, jacks, faceplates, etc). That keeps them from usually turning in
overtime. It gives them an incentive for completing installs in a timely
manner (2 hr install = $25/hr/tech). Any service calls resulting from a
faulty/sloppy install in the first 30 days result in the installer techs
going on site to fix it on THEIR time, so they have an incentive to get it
done right the first time around.
>
> We have a few other
local IT/phone/security system consultants who will occasionally bring us a
customer and offer to install them, since they are an existing consulting
customer for them anyway and usually selling them a custom network/phone
system/security system/audio system anyway. We will usually give them $125
or $150 and provide the CPE and minimal technical support. They will bring
us the contract/customer worksheet for our files, and we don't even have to
go on site. Since we usually charge $149 for the setup, we often let the
consultant charge whatever he wants, and keep it, and put in as many custom
cable runs and terminations as they can sell. We just start picking up the
monthly billing.
>
> Those are good relationships to have.
>
> Pete Davis
> NoDial.net
>
> chris
cooper wrote:
>
> Im sure this has been covered
beforeĀ
..
>
>
Have any of you outsourced
installations? If so, has it been a positive experience, how much do
you pay a contractor?
>
>
Thanks
>
Chris
No virus found in this incoming
message.
Checked by AVG Free
Edition.
Version: 7.1.405 / Virus Database: 268.12.7/454 - Release Date:
9/21/2006
------- End of Original Message -------
No virus found in this incoming message.
Checked by AVG Free Edition.
Version: 7.1.405 / Virus Database: 268.12.7/454 - Release Date: 9/21/2006
--
WISPA Wireless List:
wireless@wispa.org
Subscribe/Unsubscribe:
http://lists.wispa.org/mailman/listinfo/wireless
Archives:
http://lists.wispa.org/pipermail/wireless/
No virus found in this incoming message.
Checked by AVG Free
Edition.
Version: 7.1.405 / Virus Database: 268.12.8/455 - Release Date:
9/22/2006
