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gordons

  • Posts: 163
Using self employed staff
« on: May 07, 2005, 05:24:31 pm »
I put a message on here last week asking about taking on staff and was advised to use self employed staff. If i did this what would i be able to do to stop them from saying to my customers that they could clean there windows cheaper and at the same standard?  :o

AuRavelling79

  • Posts: 25385
Re: Using self employed staff
« Reply #1 on: May 07, 2005, 05:27:56 pm »
Nothing - but what could you do to stop an employee doing the same? Take him to court? They'd laugh at you!

Seriously though - just do a good enough job at the right price and you'll not lose any customers that you'd care about.
It's a game of three halves!

texas girl

  • Posts: 348
Re: Using self employed staff
« Reply #2 on: May 08, 2005, 03:26:53 am »
I have been using self-employed staff for 10 years.

I have developed certain standards of operation and policies to discourage competition from my contractors.

To begin with, some people I hire have cleaned windows in the past and want to again but are not employed currently.

Many I hire do remodeling, lawn mowing, house cleaning, etc.

They want part time income but do not desire to have their own window cleaning company.

75 % of the people I hire have little window cleaning experience.

I actually put an ad in the paper. I advertise for experience, but the main requirements are; a phone, be reliable and honest, and have own transportation.

No phone; forget it. No car? Be serious!

Honesty is the most important after that.

Everyone signs an agreement stating that they are indeed an independent contractor and are responsible for their own insurance, well being, etc.

Then is a statement that says as long as they contract from me they can not bid on my jobs or compete against me. To do so will result in immediate loss of all accounts from me and is highly unethical and dishonest.

Illegal? No. But unethical? Yes. I take it personally when someone stabs me in the back. I react immediately. Compete them into a corner they do not want to go to. Having clients for a while helps but even new ones have ethics usually.

My contractors even collect cash from my customers. The good thing is that they get paid every week. I may have to wait 30 days.

I would not hire one of my competitors to sub from me. College students are great contractors.

I won't bore you with the details so if you want to know how I do it PM me and I will share everything I know.

There is an art to subcontacting successfully. The last failure I had stole money from me and my tools. Lied to my face constantly. Chumped me. Stole $1000.00.

I wrote her and said "what goes around comes around." That is a true statement.  Wow; that was strange. 2 weeks later she was dead.

She dropped dead from a heart attack out of the blue at age 44. 2 weeks after she was let go. Died at her house.

Still gives me chills today. That was in April.

It is possible to subcontract legally and successfully? Yes. Easy; no. Worth it? Yes.

Good luck.

Hugs :-*

Debbie

Ian_Giles

  • Posts: 2986
Re: Using self employed staff
« Reply #3 on: May 08, 2005, 09:46:38 am »
For years I used self employed staff, I stopped some time ago now.
Unfortunatly the tax man, should he catch a whiff of what you are doing will say that they should be on the books :-\
If you are doing it the self employed way, if it shows that you are doing so anywhere on your tax returns you will have your collar felt :-\

That aside, if you are lucky enough to find someone who will stay long enough, you can get them to sign a contract stating the conditions of work.
What you may put in there is up to you, in a court of law it would be meaningless, but the employee isn't to know that! So he or she may well abide by your conditions.

It worked well for me, I have had them leave and set up by themselves, and they have never been able to take more than one or two accounts with them.

I had one guy who had been with me a couple of years, very good window cleaner, really good looking bloke, got on great with the customers (particularly the females).
He left, no, was sacked after I caught him out, to big a story to go into the details here, but once I knew what he was up too I had printed (was before computers were common place) a leaflet saying that a former employee might be calling on you and attempting to poach their business away from me.
I was careful not to name names (risk of libel :-\) He took no more than about 4 accounts.

If you are a faceless boss, whom your customers never get to see or talk to, then you could well lose a few more if a former employee tried to poach them, but even then it would not be that many.

Others may have had different experiences, sometimes personalities and differing ways of running a business will have a greater or lesser impact, who knows?
But for me personally it was never a problem.

Regards,

Ian
Ian. ISM CLEANING SERVICES

karlosdaze

Re: Using self employed staff
« Reply #4 on: May 08, 2005, 02:40:19 pm »
The last failure I had stole money from me and my tools. Lied to my face constantly. Chumped me. Stole $1000.00.

I wrote her and said "what goes around comes around." That is a true statement.  Wow; that was strange. 2 weeks later she was dead.

She dropped dead from a heart attack out of the blue at age 44. 2 weeks after she was let go. Died at her house.
We have a witch among us. Burn her at the stake, stab her with yer squeegees. Oh ....... hang on, I might get cursed :(

Marc's on the Glass, LLC

  • Posts: 134
Re: Using self employed staff
« Reply #5 on: May 09, 2005, 04:42:53 am »
Independant contractor or employee???  It doesn't matter what you state in a contract with your worker.  There are certain criteria that your state and federal government look at to determine whether your business relationship with a worker is subcontractor (SC) or employee. 

I advise anyone considering hiring SC's to get a lawyer and determine exactly what they need to do to employ such work.  If you are ever discovered with a "SC" and it is determined by your scenario and their criteria that he is, in fact, an employee, then you as the employer are responsible for all unpaid taxes plus more, plus fines, plus insurance fines, plus providing matching benefits (medical, 401k, etc...) that any of your staff who might be actual employees have.  Also, if you have a "SC" working for you and he gets hurt, and it is found by the legal system that, in their opinion, he was actually an employee, then you, the hiree, are responsible for all damages and workers compensation!

I have seen some business owners go down in flames because they wanted the best of both worlds.  Hire a worker who signs no compete clauses and other contractual agreements (basically controlling them as if an employee), but not having to pay taxes, workers' ccmp, and other benefits.

If you want to get bigger, to the point of needing a staff, then you have to take the risks of training a potential competitor.  If you hire them as an employee, you can legally have them sign a no compete clause for a reasonable time frame, but you must pay the piper.  If you hire them as a SC, they are free to conduct business as they wish, as a separate entity, a private business person.  You cannot contract them to not clean windows for anyone but yourself.

I don't want to ramble.  So I will simply recommend that anyone considering hiring a worker thoroughly research what a legal and proper "employer/sub-contractor relationship entails.

Best Regards

Ian_Giles

  • Posts: 2986
Re: Using self employed staff
« Reply #6 on: May 09, 2005, 06:44:47 am »
Ouch!
The laws stateside are a little different to our own, but similar at least in that if a sub contractor is deemed to be dependant full time on work you supply, then you must put him on the books, pay employers liability, his PAYE etc.
I'm also pretty sure that you can't legally restrict their right to trade; at least as far as window cleaning is concerned.
Any such contract is I believe no more than a gentleman’s agreement, still worth doing though.

Depending on the type of work you have, it isn't very easy to make money from an employee with window cleaning.
Lets assume for the sake of argument that your work is 95% residential, and a further assumption that you are turning out work to the tune of £150.00 a day.

Your expectation would be that once an employee is trained up, he or she would also be turning over at least a similar amount.
It will generally take at the very least 3 or more months before they are beginning to get up to a reasonable speed plus doing the job properly.

If you are going to have this person working by your side, your personal turnover will drop.
Lets make yet another assumption that you have employed a good un', and after 3 months he or she is now a competent window cleaner who can work almost as fast as yourself (a pretty tall order).
You will not be turning over between you double what you were doing by yourself.
If you were doing £150, two of you may do £240-£250 if you are lucky.
Doesn't sound that bad though does it?
If you don't put him on the books and are paying him or her about £7.00 an hour then you should be clearing £40 or £50 a day.
But slap in a dose of reality and allow for down time from bad weather and other factors and the amount turned over will drop, can still be worth it if your employee is Self Employed though.
You get caught by the taxman and it won't be worth it mind!

If you do it all legally, on the books, PAYE, Employers NI contributions (much higher than those you will be paying), employers liability (very expensive compared to your own Public Liability) and the time you will have to spend on dealing with these things then suddenly the £40 or £50 a day you are clearing isn't profit anymore :-\

Even going the self-employed route, it isn't easy to make money, finding a good un' is no easy task, having them stay long enough to start covering your costs is a challenge too.
They will not work as fast as you could work without considerable incentive, pay them by the hour and there will be days when they are coasting, pay them per account and you will have to pay them around 50% of what they turn over if you want to make money on them.
For the most efficient manner of working you need them set up to work BY THEMSELVES!
Your own turnover will drop because you are going to lose time setting them up, checking their work and so.
Are they going to be using their own car? Then you have to pay them mileage.
If they are older rather than younger, they may be married, have kids, mortgage or rent and myriad other bills that need to be paid, it can be hard for those in that position to be able to afford to be a window cleaner who is working for someone else, the wage is just too variable (self employed that is).

All of the above changes if your work is commercial, your business turnover could well be double the figures I have been talking of so far, and employing workers can be essential.

Over a 15 year period I reckon I had close to or even above 100 people work for me :o
Some may have lasted no more than a morning, others a few days, some a couple of months or just a week or two, those that lasted a year or more all left and started up in competition :-\
Apart from 2 of them, I get on great with all of my ex employees, I've helped them out, sold work to them, even had them caretake my shops when I have gone on holiday.
But all of the good ones ended out leaving to set up for themselves.

Which, because the work was almost entirely residential that they were cleaning
 I no longer employ anyone.

If you've got what it takes then the sky’s the limit! But go into it with yours eyes open!
The last thing you need worry about is someone poaching your work though, it might happen, but you will not lose more than a couple at worst.

Regards,

Ian
Ian. ISM CLEANING SERVICES

gaza

  • Posts: 1642
Re: Using self employed staff
« Reply #7 on: May 10, 2005, 11:56:20 am »
If ,and Im thinking of it employing someone I would make sure he was smaller than me cus if I CAUGHT HIM KNICKING CUSTOMERS ,Queensbury rules need not apply,it would be pistols at dawn. Thanks lads and ladies and Texas Girl ;D sorry
couldnt resist that one. for a very interesting topic, its made me well aware of what Im letting myself in for.
I used to deliver for a famous American delivery firm [you know the one Texas .The one that has glam lads on their calender,pin up delivery boys in brown uniforms.execpt I wasnt chosen :-[ and in their contract you couldnt poach their customers for I think a 6 month period after you left their employment,carnt see a big firm like them slipping up on the legal side might be worth looking into.
IM AT THAT AGE MY BACK GOES OUT MORE THAN I DO

texas girl

  • Posts: 348
Re: Using self employed staff
« Reply #8 on: May 11, 2005, 05:31:56 am »
Contracting out work to others is perfectly legal but you must follow the rules.

First of all research and find out what the rules are.

I do not pay people under the table. I pay them by check; my company check.

At the end of the year they receive 1099 's (misc income; just as I receive 1099's from my commercial jobs).

It is nothing to be afraid of; just follow the rules. And be honest.

And as Ian said, you cant make anyone sign a noncompete form but you can have them sign an agreement with you not to compete against you because it is unethical and they will no longer do any contracts with you.

It sounds legal but really it would mean nothing in court. It is about honesty though. And it is good to give a heads up to your clients if someone decides to break your agreement and tries to steal your contracts.

That itself is dishonest and many clients do not trust doing business with someone who has dishonored you.

I think a good choice is someone who does not want to own a  windowcleaning company.

Some people just need a part time income while they are aspiring to do something else.

I am still shocked about my last contractor. She called me names when I had the police meet me at her house to get back my tools. She kept everything she needed to compete against me. Lied about all that and I had foolishly given her a ton of things. So she got away with it.

Looking back it was her method. She planned it all along I think.

I broke my own rule of not getting a week ahead of her in the contracts paid and therefore I had no strings financially to make her return anything to me.

I always get ahead one week for that reason as well as making sure satisfaction is achieved and hopefully invoice or get paid  before I pay.

But she played me as she played everyone. Con artist.

At first I was angry but we are told (commanded)in the Bible to love one another as Jesus loved His disciples.

Hard to do. But I felt sorry for her in a way. Living life incorrectly and dishonestly will keep you from receiving your potential.

Revenge is stupid and a waste of energy. So I did write her a letter telling her that I wished her no harm and she knew if what she was doing was honest and etc.

I was very surprised to find out she had a heart attack a couple of weeks later. Such a bummer. Really don't know details.Only 44.

But she did not take care of herself. Had high blood pressure and smoked and did not take proper medicine like she should have.

So sad. She had a 4 year old son. Did freak me out a bit though because of the way everything happened. 

She was beautiful also.  6 feet Tall and blonde. Just really bad choices over and over again. I suspected maybe drugs also.

 She was the slowest worker I had seen ever but she did a perfect job. She kept my money a few times and I finally had enough.

2 guys that did some work for me got hooked on methamphetamine. Good workers too. Why do they do it? Why be a slave to drugs?

It ruined their lives at that time. Don't know where they are now.

One thing about subbing out; there is turnover. If someone was really good and intelligent and motivated they would not be looking for a job. It is the pool of people you have to choose from. Rarely you will find a good one and they will remain a long time.

I have sold some of my business to my contractors. I know for a fact that they have their own business because I have proof!  I sold(cheaper than cheap) some of the invoicing contracts that they were servicing to them  because I choose to not spend too much time in the office. Time to play a little.

And all of my contractors do things for other people as well.

Just follow the rules.

Ramble Ramble. People are interesting.

Hugs :-*

 
Debbie

Re: Using self employed staff
« Reply #9 on: May 11, 2005, 07:07:47 pm »
If ,and Im thinking of it employing someone I would make sure he was smaller than me cus if I CAUGHT HIM KNICKING CUSTOMERS ,Queensbury rules need not apply

LOL. Class advice.