Paying per the job?

Discussion in 'Business Operations' started by marko, Feb 22, 2005.

  1. marko

    marko LawnSite Senior Member
    Posts: 963

    I talked to my CPA last night and he had absolutely no problem with paying an employee on a per job basis rather than hourly. Said it was not illegal. On another note, he also opened my eyes to paying employees under the table etc. Has a partner who has a client that came in for years laughed about paying guys under the table and scamming on workers comp, taxes, etc. Hired an undocumented worker last year, paid him cash and the laboror lost 3 fingers, and is in the process of being sued! I guess you save a couple thousand in the short term, but if anything goes wrong your screwed. Not worth the gamble! Anyways, any thoughts or reasons why people say it is illegal to pay by the job? I think productivity would improve as long as you can keep the quality.
     
  2. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Are you referring to "piece work" or 1099?

    Piece work will work as long as you are paying at least the minimum wage. But 1099 an employee is illegal. With piece work, you will still be paying all the taxes associated with the employee including SS tax.
     
  3. marko

    marko LawnSite Senior Member
    Posts: 963

    Ok, That makes sense. 1099 is contract right? I think that would be risky to try and float as a lco. I was thinking of a rate that comes out to about $10 - 12/hr for the right person (rather than a straight $8 - 9/hr) with the motivation factor helping a lot. Never had luck hiring someone hourly with the way people seem to like to goof off these days.
     
  4. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    Why does everyone always try to come up with these crazy ways to avoid paying your employees. If you don't want to pay them don't hire them. If you are affraid of payrol taxes #1 you shouldn't be. #2 You can hire a payrol company for next to nothing our cost $50 a month for 6 employees. #3 you can also go through a temp service. #4 if you 1099 someone all year then at tax time they find out they owe the IRS $3000 all they have to do is tell the IRS they thought they were your employee and then guess what happens. You not only have to pay all the taxes you normally would have to pay you have to pay the employee share as well, because the IRS assumes the the amount you payed them was their net check plus all the fines.

    As far as how you determine the amount of your employees pay that is whatever you want to do as long as they break min wage.

    I suggest a base pay of x a week plus extra for increased production. By paying a flat weekly salary they are encouraged to get more work done so they can have a 3 day weekend. It doesn't effect their pay if they work to hard.
     
  5. scottt

    scottt LawnSite Senior Member
    Posts: 269

    He never mentioned anything about getting out of paying taxes. He was just looking for a way to get more production out of employees and keeping them longer. I think it's a great idea, but it will take some tweaking to keep everyone satisfied.
     
  6. marko

    marko LawnSite Senior Member
    Posts: 963

    Scottt, You are correct. If the post would have been read in its entirety I am willing to pay someone 10 - 12/hr instead of 7 or 8, but the employee is in control of that. It is funny how some people jump into a forum, read here and there, then go into attack mode.
     
  7. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    You didn't read my post aparently. My first comment was directed at the second part of the original post talking about paying people under the table. Unless I'm crazy and just made up that part in my mind. He made a comment about how it was risky to pay people under the table.

    "....Hired an undocumented worker last year, paid him cash and the laboror lost 3 fingers, and is in the process of being sued!.."

    So i guess agreeing with him that paying people under the table is a bad thing, I am attacking him.

    The second part of my post was adding to the first part of the post about different compensation ideas.

    Don't jump to conclusions. (someone must be paying under the table, little defensive are we.. lol)
     
  8. gogetter

    gogetter Banned
    Posts: 3,256

    Actually, you need to re-read the original post.
    HE didn't hire an undocumented worker, he was talking about someone else.
    And he never did say anything about avoiding taxes.
     
  9. Littleriver1

    Littleriver1 LawnSite Senior Member
    Posts: 811

    I don't think anyone want to short cut paying payroll tax. Paying someone by the job, or per cut, is not contract (1099). Just make sure it comes out to at least minmum wage per hour.
     
  10. dfwmowingman

    dfwmowingman LawnSite Member
    Posts: 6

    I am just confused now ! what the heck were we originally talking about anyway ? Somebody was under someone's table and got three fingers cut off ? I'm sure they got paid anyway haha !...Sorry ...didn't mean to distract from the sincerity of the issue......

    DFW
     

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