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Paying Overtime

Discussion in 'Lawn Mowing' started by gway, May 8, 2001.

  1. gway

    gway LawnSite Member
    Posts: 36

    im getting sick and tired of all these workers complaining about this and that when it comes to gettin paid. they dont realize how lucky they are not to be workin on a bannana (sp) farm somewhere down in mexico. these guys are killin me when they are out there doing the work i can do in 8 hours takes them 12.5 to get it done...were working about avg. 64 hours a week here and after 40 i used tp pay up $$ now that the cash is all but used up they are hittin me up for overtime and that is crushn me to death!!! they think were makin $$ hand over fist, but im sure if oyu know its not all like that after ins, taxes expen. and all the other garbage were shelln out. so the question is do i have to pay overtime or how can i get around this and on average how many hours are you guys out there?? we have 2 dcrews pushn out 30 houses per day 5 days, and a 6th for landscapen??

  2. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    We bank roll their hours and then apply the extra time to even out those weeks that they arent able to get in 40 due to inclement weather or personal matters.

    This avoids the cash out of pocket and keeps things on an even keel for us.

  3. gway

    gway LawnSite Member
    Posts: 36

    do you think this would fly???

    say i pay the workers the reg 40 hour check for that week and role all the over 40 hours till the end of the year since they all cant find a job over the winter and this way they will get a check every week from us durring the winter for the over time hours that pilled up all year...just askn
  4. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    We just keep rolling over them hours and yes they should end up with with 3-5 weeks of payroll at the end of the season if you keep rolling like you are with them 60 hour weeks in the spring and fall.

  5. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

  6. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412


    better change your pay habits cuz when (not if) dept of labor gets wind they will hand you your azz on a silver platter. Regardless of when you start doing the pay thing the right way, you are still liable for back wages for as far back as the inspector sees fit to "probe" (pun intended).

    The latest issue of Tree Care Industry magazine has a good article on overtime. (pub of nat'l arborist ass'n) You would be surprised as to how wages are figured for time and a half-its not what you would ordinarily expect esp if you have employees regularly working OT.
  7. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,840

    I have used the method Kris does as well. We call it "Comp Time". I got the idea because another, larger, landscaping company does the same thing. They don't pay anything over 40 hours and then roll it over until the late fall or winter. Then their guys take a month or two off and travel to Mexico or whatever, still paid.

    I've never used it to that degree. When I used it I would let the guys get a little over time (10 hours) and then I'd start accruing comp time. It sometimes gets up to where someone has a week or two accrued. But even that's fairly rare.

    It helps that I explained this to the employees before they were hired. Then they know what they are getting into. And you get them to agree to the idea when they are most vulnerable and likely to accept it (when they just want a job.)

    I don't know about the legalities of witholding pay for this length of time but I'm pretty sure you'd have to pay the comp time at the time and a half rate at least if you wanted to be 100% legal.

    I do know that the company my wife used to work for used comp time as well. And they employee hundreds of people. Only difference was they'd let the employees accrue comp time after 40 hours and use it the same as vacation time, any time they wanted. For obvious reasons, we can't do that in our industry.

    Another thing you might consider in regards to overtime; if you do the math, hiring one more guy is more cost effective than having a bunch of employees at 10-20 hours of overtime per week. Check out the math; Say you have 3 guys at a rate of $8 per hour. If they all get just 10 hours of overtime per week that's a total of $360.00 in overtime. You could have hired another guy at $8 an hour for a full 40 hour week for less ($8 x 40 = $320).

    So knowing that, what if you hired another guy? Then he takes worker A's place on Monday. On Tuesday he takes worker B's place. On Wednesday he takes worker C's place. On Thursday, they all work. And on friday, the new guy takes a day off. Thus, they all work about 4 10 hour days. Plus you get an extra 10 hours of labor one day!!!

    Just think of how much you are losing out if you are paying out 20+ hours of overtime each week!!!

    It's a psychological game we play with ourseives. We don't think we need to hire an additional worker. But if you run the math, you're stupid not to.

    One last tip - here's what I do when I don't want to hire an additional employee. I set up the week so that the crews are working 4 days per week (typically Tues - Fri) and then I will only work them on Monday or Saturday if the job(s) we are doing has a profit margin that is high enough to warrant the increased cost in overtime. Otherwise, the job waits until the next week.
  8. jaclawn

    jaclawn LawnSite Senior Member
    Posts: 490

    While the idea of bankrolling overtime hours into compensation for time not worked, is appealing to an employer, I as an employee would not be happy with that arrangement. Here is why:

    Say, in April and May, I aquire 10 hours of OT per week, June, 5 hours, and Sept and OCt. 5 hours per week as well. These are realistic numbers based on OUR season, and may be different in other parts of the couuntry. That is a total of 140 OT hours per season. Now, the employer would be "holding" the money that I made all those months, then paying it out to me in Nov. or Dec. when the work slows or stops. Sounds great, but the employer is able to make interest off that money all season long. It may not be much, but mutiply it over several employees, and several years, and you just paid for your bosses Florida vacation.

    Another thought, if you r employees are "laid off" in the off season, are they eligable for umemployment conpensation? If so, them getting a pay check from you for those weeks that you are paying them would disqualify them from recieving the unemployment benefits. At least that is how it works in out state.

    I am also not sure of the legalities of this situation.

    It is the same situation with most mortgage companies. They collect your property taxes, and sometimes property insurance premiums each month, place them in an escrow account, and pay your tax and insurance bill at the end of the year. They are making interest off this money, you can bet. It is your money, but you don't get the interest. They all claim that this is factored into the interest rate that they gave to you, but it is a high dollar portion of their business.

    I also agree with the statement by jimlewis about only using OT on high dollar jobs. Our maintenance route is 3 or 3.5 days long, leaving the rest of the week for other work. If that "other" work is going to send us into OT, it gets billed accordingly.
  9. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    ". It is your money, but you don't get the interest."

    My mortgage co. credits my escrow account with the interest annually. 5.5%. Its the law at least in my state.
  10. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    Over our 23 years in business we've been audited by everybody (although not all at once, thank God). Feds and State can only go back 3 years when auditing payroll records. We currently have 70 people on the payroll doing landscape work, and our HR person participates on various local authorities/boards that work with the Bureau of Employment Security - and she attends the various seminars put on for people in her position. Not to mention that we ask lots of questions during audits so that we understand what the rules are and how they are applied.

    What you are all describing is not legal. If you get caught, and a audit is really the only way that you would get caught, if you get caught you will have to pay the back wages owed for the week in question. The fact that you may have paid the employee for the back wages in a later week, or month, will not have a bearing on what the employee is owed for the week(s) in question. The auditor will tell you that paying an employee for time not worked (as in paying them the 'comp time' in winter) is nice of you, but has no bearing on the fact that you cheated the employee out of legal OT in the week it was earned. And make no mistake, it is considered cheating in their eyes. They will FORCE you to pay the OT (plus a nominal penalty to them for your ignorance). They will make you PROVE that you have then paid the employee. They will make you prove that you did a through search for the employee, and if you cannot find them they may escrow the monies owed so that when/if the employee surfaces they will then get the dough that they rightfully earned.

    You are playing with fire if you do not pay them (your employees) their rightfully owed overtime as dictated by law. One complaint from a disgruntled employee is usually not enough to spark an audit. But several complaints could do it.

    This is part of being in business. Yes, some rules make it difficult to operate. However, breaking the rules can often put you out of business altogether if you're not careful. Say what you want about overbearing governmental regulations - they still apply.

    A good book to read that will assist in knowing these rules is "Hiring Independent Contractors - The Employer's Legal Guide" by Attorney Stephen Fishman, and published by Nolo Publishing. It costs $34.95 and is available at Barnes & Noble. While this book is for people contemplating using subs for work (we have just over 4300 subs in winter), it does a great job explaining what an "employee" is and what you must do to stay in compliance with the state and federal laws.

    Touchy subject.... didn' t mean to irritate anyone.

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