We actually did that for a while. It works out well, except that a contractor must provide his own tools and manage his own time. In other words, I cannot promise that he will be at Mr Smith's house at 2:00p on Wednesday. He has to be the one to schedule installs. It gets real fuzzy there.


Rick Smith wrote:

the answer is hire a company to do installations for you.  if your employee just happens to own that company, well, oh well…


It’s all invoices.   Pay them as normal, and you don’t need to worry about taxes, etc.  Your employee (or sub’d company J…) does that on their own.


From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]] On Behalf Of Tom DeReggi
Sent: Sunday, September 24, 2006 5:28 PM
To: WISPA General List
Subject: Re: [WISPA] Outsourced installations


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 -----

From: Pete Davis

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

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
Wireless Networking
Network Design, Installation and Administration

---------- 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 before…..
Have any of you outsourced installations?  If so, has it been a positive experience, how much do you pay a contractor?

No virus found in this incoming 
Checked by AVG Free 
Version: 7.1.405 / Virus Database: 268.12.7/454 - Release Date: 

------- 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


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

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

WISPA Wireless List: wireless@wispa.org


Archives: http://lists.wispa.org/pipermail/wireless/

Reply via email to