I have to lose the shirts, not require a Do Not Compete, can’t do like work (can’t clean windows because that’s what I do…they have to do my blind cleaning/pressure washing/solar panel other cleaning) and must have comp coverage on any any employees they hire. If they have no employees they still must purchase comp coverage which doesn’t cover them but will still cost $1,000+ per yr.
At this point I’m going after a reduction in the amount of premium they are charging. State Fund has determined that the subcontractors I have paid last audit period are not subs and categorized them as hourly employees. In some respects* I don’t dispute this recategorization. My concern is the rate at which premiums were determined. The subcontractors were paid 55% of the jobs subbed out to them. This percentage effectively paid them what they used to make as hourly employees ($25 an hour) plus the savings I was enjoying not having to pay $28 per hundred for comp coverage. So the guys averaged $48 per hour and were paid that way. I would request that State Fund base the premium for the audit period on the base rate of $25 per hour and not charge me based on the $48 per hour they took home. Had I called the guys hourly and paid them $25 an hour I would have paid 28% for all dollars delivered to the guys but instead I’m paying this, plus 28% on the other dollars (dollars I saved since I didn’t have the comp expense, because they were subs) that I was passing on the guys.
State fund is literally the worst organization ever. I could go on forever about them.
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At the end of the day…be exceedingly careful (don’t do it) if you plan on using other window cleaners as subs. I may hear from EDD and the State of Ca. before this is over. I’m back to paying the guys hourly and it seems so simple and clean after all the time spent with agreements/calculating rates/ setting up systems to track/ etc.
i understand you may have to pay hourly, I would however be interested to hear down the road if production dipped converting to hourly since spending more time becomes the incentive
I’m sorry you got stuck in this quagmire. I’ve heard of arrangements where individuals go in and just ‘take care of’ a Marriott or whatever and are subs as well for this regional outfit. I wonder if they have things set up different
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internet Tory
people see a groupon or every beginner’s rate or a sideliner’s low day pay work for wages rate and feel a full time professional company is ripping them off, without considering what’s really going on (why would they care anyway)
race to the bottom auctioning for lowest bidder, but any starving yahoo can submit a lower price, it’ll end at minimum wage I suppose. they’ll even throw in scratched glass for free! hahahahaha
what else is new lol
Never pay a percentage. It causes way too many problems. And with our work comp rates here, you just can’t make it paying a percentage.
wow, Mark, I’ve had all my problems with hourly not percentage
did you find quality issues or what issues did you find with percentage?
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In CA our work comp is set at 27% right now, so paying 20-30% commission becomes too expensive. On top of that, I found too many employees become estimating experts and if they don’t feel a job was quoted right and “they’re not going to make enough”, they have issues. I’ve had this happen with good employees that were hourly and then we switched to commission and we we’re going tit for tat on jobs. I ultimately fired them all but it was an on going thing. There were also quality issues. Finish work fast, go home early, make $40 an hour. Then getting them to do go backs was a fight. On top of that in CA, you can’t not pay them something for go backs, so you’d have to pay minimum wage even on go backs for their issues on a job. Now you’re still tracking timesheets. Then if they had overtime, you have to figure out which pay is greater, commission or overtime.
It was all bad
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got it, I see your point, thanks for elaborating Mark
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I will settle in with hourly, charge what I need to charge to make a profit, pay the guys better than “usual” and take only clients that want the level of service we will deliver. We won’t get them all but we won’t have to hire either. Service the high end with quality and keep it relatively simply. No real simple in Ca with agencies/regulations/limitations/impossible layers of bureaucracy. I’m blessed and grateful in the midst of it all. Relatively small potatoes. 
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@mshramek
I had those issues at first too. The way I got around it was making a punch list.
On the phone I would ask questions and based on our conversation it was x amount. Here is an example:
Lady calls with a 3000 sq ft home and i’m looking at it on google satellite and street view, I know the area no cut ups no high interiors so its 340$.
I hand it to one or two of the guys and when they get there they go over the punch list from where to park to checking their breath.
First thing after intro’s is getting the tour and a window count (residential of course). The work order has one too, also says no high interiors or frenchies…no curve balls. I’ve already verified the sq footage online (they tend to fudge a little sometimes over the phone) but when they walk it, there’s high interiors over a piano on a white carpet and she told me she had tile!
Ok, so they now need to negotiate. Mind you this is after they’ve already given a 150$ deposit. I ain’t gonna rape em but I ain’t gonna get raped either.
So I call her up and say I misunderstood or mispoke because its now going to take another hour to clean the windows because of this so I have to add another 78 bucks. Sorry but thats whats up. She knows she tried to get over on me, but it aint happening.
Not once have we got kicked off a property for that, but it rarely happened to where it needed to be re bid.
As for quality control, at the end of the job, the client was to sign off on the work order that she is happy with the work.
The guys call in when they are going to leave, and 5 minutes later the customer care manager (usually me) calls to ask her how it went. I already know it went ok cuz the guys told me, but calling adds another layer in that if she says you know what they were so lousy i just wanted them out of my life so I just signed it, then we got a problem.
They don’t get paid until we get a green light, and if she says that she don’t want them back guess what? They did it for free. So it behooves them to pucker up while they are there.
Percentage works for me, and we seldom had quality control issues. But when we did, man it was bad. Embarrassing bad.
And I was using guys who had their own companies too. They were subs so I didn’t have to pay state fund for them, it was perfectly legal per my audit too.
