Pay by the Job vs Hourly Pay

Discussion in 'Business Operations' started by Fantasy Lawns, Apr 20, 2006.

  1. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Fore those whom "pay by the job" ..... how does one go about certain "grey areas"

    I understand how piece work or commission pay is used in industry .... but I am not clear on how it works in the service environment

    ie you pay by the job & in route to the other job he gets in an accident

    Is he covered by WC or even the Insurance ... as he really is not "on the clock" or is he ??

    How does one get the employee do other errands ... such as getting fuel or picking up equip .... is this a separate ... pay by the job ??

    According to the Fair Labor Standards Act (FLSA), the employer is liable to those individuals for overtime wages for work performed ==>whether the work is performed on an hourly or piece-rate basis.

    How does one legally get around this ??? OT that is

    Again according to the FLSA some employers contractors believe they can avoid paying overtime to employees by paying them on a piece-rate basis.

    From what I read of whether an employee is paid hourly or on a piece-rate basis, he is entitled to overtime pay for hours worked over 40 hours a week. And in legal terms, an employee cannot contractually agree to waive his right to overtime pay.

    I maybe wrong on the OT thing .... as many consider Farm work or Agriculture work OT exempt in varies states .... I've never ask a legal advice

    Those that pay by piece .... what has the legal advice been given

    Only asking as I'm looking into doing this in some form if possible
     
  2. Badgerz

    Badgerz LawnSite Member
    Posts: 122

    Why don't you just pay them an hourly wage from the time they come in until they leave? Unless I misunderstood it sounds like you're looking for a way to be a cheap boss. If that's the case you won't keep good help long.
     
  3. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,140

    I think the idea is to reduce labor cost, correct? I am guessing it is one way to do away with OT, and I think JMI has a very successful business using this method?
     
  4. PGA

    PGA LawnSite Senior Member
    Posts: 710

    The first and only company I worked for we got paid both.

    He paid dick for hourly but he made it up by bonuses. He would give each guy in the truck $.50 extra per house that was completed. And when I was doing 100-150 houses a week it turned out to be a nice chunk of change on top of the paycheck.

    It was an extra incentive to get everything done.
     
  5. Badgerz

    Badgerz LawnSite Member
    Posts: 122

    Now there's a decent idea.
     
  6. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Actually my bonus set up for hourlies is base on yearly hours, days missed, uniform, attitude etc. at the 1st of the year I take the total hours ....say 2000 hours & a normal would be .10 per hour or $200 up to .50 per hour or $1000

    Being creative, having an ability to adapt with a changing environment, communication, experimenting & sooo many factors moves a real business forward

    Fore me ..... cheap ..... is when I buy a $9000 new mower every 2-3 years .... cheap is when I turn over 1/3 of my 2 cycle yearly ..... cheap is painting the trailers every 2 years .... cheap is my weekly-monthly maintenance program .... cheap is a back up Lazer ...she hit 1600 hrs in 2 years & the new Dixie last summer .... is .... cheaply appreciated by the crew .... cheap is a back up Walker for pretty much the same .... cheap .... reason ... but they did luv .... although .... cheaply .... the new Walker EFI 3 years ago

    Anywho .... my cheap thoughts were ....how to reward those ...more productive ....given equal equipment & size of route

    I have +250 properties ....not all equal size .... but easily 150 are of almost exact size .... I "average' 150 hrs weekly with a $2k payroll ... we have much smaller lots than most up north .... 1/4-1/3 is average .... even a 7 figure home on the water may be only 1 acre

    Just for quick number crunching ( as larger properties would really have to have a greater "value" in commission) ....but just fore numbers sake .... that comes too $8 per yard ($2k weekly payroll /250)

    Having 3 (2) man crews at this point .... but if paying by the yard .... could that be "shaved" by motivating those involved .... as being payed per yard .... to cut as many as they can get .... in competition to get as many of the 250 yards they can get .... thus .... cheaply .... actually make more weekly ...than if paid by the hour

    Granted quality has to stay .... safety both on the job & on the road to other jobs .... MUST stay

    I really don't know if OT really will be an issue .... had about 300 hrs OT last year .... just thinking of 2007 ..... some silly .... cheap reason I already thinking of next year

    Plus in the winter time when we cut bi-weekly .... my "core" employees may elect to do the jobs ... with less workers ... so they can make more
     
  7. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004


    yeah... im sure justmowit has a hell of a time keeping good help to earn that 800 a week since he pays by the yard.

    sounds more like someone has some some lazy employees...
     
  8. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    I have been considering doing a hybrid myself. I remember when I worked at a different job for comission. I worked my butt off. But, when I changed employers but still did the same thing and they paid hourly I slowed down considerably.

    So, I am thinking about paying my workers minimum wage with a comission for each property done. This way they are hauling butt when it counts and if I need them to do extra work like clean the gear they are still getting paid but I am not paying them a fortune for easy work.

    I suppose the pay will equal the difficulty of work.

    What do you all think?
     
  9. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Because hourly pay rewards ineficiency with overtime
     
  10. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Steve, get in touch with me... I can point you in the right direction
     

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