Pay Employees For Driving Time?

[nobagger]

Originally Posted by nviewlandscaping

Again, I do pay my employees for drive time anyway, I know plenty of people that dont. A lot of people in other professions have long commutes to work and dont get paid for it so I dont think its that crazy of a question. Anyway thanks for the responses I think we can call the discussion closed before it turns into an unecessary rant.

Ok so if you worked in a big city and you had to be at work by 7am and you had to leave your house by 5am in order to get there by 7am you would expect that company to pay you for the extra 2 hours? Good luck with that. And on the flip side if you were a delivery guy and only got paid while making the actual delivery, you would have a long day with no pay.

[sdk1959]

It's legal as long as they average at least the minimum wage per hour. See link below. This arrangement would be feasible for lawn care accounts where you know how long it should take to cut a property and pay a fair commission.

But you have to make it worth it to them so they will "average" $1-3 an hour more than if they were paid hourly including drive time.

The upside to paying a commission per property is they will work more efficiently and with a "sense of urgency" to get the job done. When your route gets tighter and you get better equipment there is less drive time and your more productive on site which translates to higher income for both you and your employees. A hourly employee will see a tighter route as more work per hour and less drive time. You also know exactly what your labor will cost weekly, negating factors such as extra time cutting tall grass due to rain between cuts for example.

http://www.dol.gov/whd/regs/compliance/whdfs20.htm

[echeandia]

SDK, You are referring to Piece Rate not Commision. A Commision is pay for the sale of an item. The Piece Rate is for performing units of work and being paid for each unit. The page I believe you want to refer to is http://www.dol.gov/whd/regs/compliance/whdfs39D.htm, which discusses factoring in wait time to determine if they have made minimum wage.

However, I believe you are wrong in using Piece work as the method of paying your employees. You should be going by the following regulation which specifically mentions travel between job sites and how they should be handled:http://www.dol.gov/whd/regs/compliance/whdfs22.htm.

You are going down a slippery slope my friend.

[nobagger]

Originally Posted by sdk1959

It's legal as long as they average at least the minimum wage per hour. See link below. This arrangement would be feasible for lawn care accounts where you know how long it should take to cut a property and pay a fair commission.

But you have to make it worth it to them so they will "average" $1-3 an hour more than if they were paid hourly including drive time.

The upside to paying a commission per property is they will work more efficiently and with a "sense of urgency" to get the job done. When your route gets tighter and you get better equipment there is less drive time and your more productive on site which translates to higher income for both you and your employees. A hourly employee will see a tighter route as more work per hour and less drive time. You also know exactly what your labor will cost weekly, negating factors such as extra time cutting tall grass due to rain between cuts for example.

http://www.dol.gov/whd/regs/compliance/whdfs20.htm

If you are paying commission, sounds like your trying to make them a sub contractor and... if they are using YOUR equipment, YOUR trucks etc to get to a job site under YOUR direction etc. then they are an employee. Sub contracting employees or paying employee's like a sub is a very sticky subject.

[sdk1959]

Originally Posted by nobagger

If you are paying commission, sounds like your trying to make them a sub contractor and... if they are using YOUR equipment, YOUR trucks etc to get to a job site under YOUR direction etc. then they are an employee. Sub contracting employees or paying employee's like a sub is a very sticky subject.

Wrong on many levels. YOU have to classify them with the IRS as a sub and pay them as a subcontractor, which means you don't withhold taxes and file a 1099 for them at the end of the year.Totally different arrangement. Has nothing to do with who owns and uses the equipment. Did you read the link in the posting? It spells it out. As long as they average the minimum wage or better and you keep track of the hours worked it's perfectly ok with the IRS. Terminex technicians for example are paid commissions on the accounts they service.

I have worked as a subcontractor in the past and know the tax rules very well. Long story short- I worked part-time as a subcontractor doing electronics work one year in the early 90's and used H&R Block for my taxes. Needless to say, they had me owing the IRS almost $2000.00. I didn't have the money then and it didn't seem right so I didn't file, then that summer a friend also said that didn't sound right and recommended a accountant he uses and I still use. This woman knew the tax rules backwards and forwards, filed an extension, took all these deductions I was entitled to that H&R Block didn't and not only did I not owe any money I got a REFUND of $612.00!!! She said H&R Block might as well filed a EZ form because they took no deductions at all.

She told me then the IRS is to be respected NOT FEARED. I abide by that advice to this day. In 2007 she got me out of a problem with some short sale stock trades. IRS had me making money on trades I lost money on. Refiled 2007 return with more proof, IRS admitted their mistake, case closed.

If you don't have a good accountant find one, their so worth it. Don't depend on Turbo Tax or some other lame software to do your taxes.