# Hiring: Definition of a sub



## Driftweed (Nov 7, 2012)

I provide all tools. I schedule all jobs. They provide transportation, insurance, fuel.

Want to pay flat rate of $100/job (3 calls/day). Full time work.

Am I paying piece work employee or subbing?

They will not have time for sidework.


----------



## greg24k (May 19, 2007)

Driftweed said:


> I provide all tools. I schedule all jobs. They provide transportation, insurance, fuel.
> 
> Want to pay flat rate of $100/job (3 calls/day). Full time work.
> 
> ...


Sub-contractor has tools and everything else stated above, he also works his schedule in to your, or sometimes you have to wait a day or two for him to make it there if he is in the middle of something. Is not what you want to pay, is what he needs to charge to stay in business and make a living... in most cases the numbers are not much off between when you need to be and he needs to be, price always works out for both parties, GC and Sub contractor, no to mention that GC will provide constant work.


----------



## Inner10 (Mar 12, 2009)

In Canada it goes like this:

- Who's tools.

- Who's schedules.

- Who's vehicle.

You have 1 & 2 so they are employees.

Their insurance won't cover them for that type of use for their vehicles.


----------



## Driftweed (Nov 7, 2012)

I know here in u.s. if i schedule & provide tools that two big flags. 

However, I don't want hourly. These are 3 hr jobs. So thats just silly. Hourly would lose. I would rather pay piecework because it would be win for everyone. 

I just dont want to pay for a spare vehicle yet. If I do hourly, well pay gets chopped in half. 

$15/hr to suit up no one would take it. Especially in short bursts.


----------



## Inner10 (Mar 12, 2009)

Driftweed said:


> I know here in u.s. if i schedule & provide tools that two big flags.
> 
> However, I don't want hourly. These are 3 hr jobs. So thats just silly. Hourly would lose. I would rather pay piecework because it would be win for everyone.
> 
> ...


I don't read ya Drift...if pay gets cut in half hourly at 15$...then pay them more.

You can pay an employee piece work.


----------



## Driftweed (Nov 7, 2012)

Its just the nature of a service based job. 

Maybe thats what I am asking? How do you pay piecework and still do the taxes?

Doesn't that make for complex tax crap? Just want to keep it simple but legal. 

Sometimes i ask the wrong questions, lol


----------



## Inner10 (Mar 12, 2009)

Not any more complicated than paying hourly.

Heck if it's 100 bucks a job and 3 jobs a day pay salary.


----------



## Metro M & L (Jun 3, 2009)

Piecework you have to track hours to be able to proce that they were compensated at a rate equivalent to minimum wage and overtime.

If not you have to make up the difference.

Piecework will get you better more consistent work. Make them come back for all mistakes and pretty soon there wont be any.


----------



## Driftweed (Nov 7, 2012)

With piecework wouldn't I have to still pay for travel?

example:

I schedule a job at 9 a.m. & 2 p.m.. "employee" picks up toolbox in the morning and goes about his merry way. If he shows up at 6 a.m. then goofs off I aint payin for that.

Job 1 is done, & he goes home doodles the wife, watches t.v. , eats a healthy lunch, whatever... Well hes "off the clock". But when does he go back on the clock? arrival on jobsite?


----------



## blacktop (Oct 28, 2012)

Driftweed said:


> With piecework wouldn't I have to still pay for travel?
> 
> example:
> 
> ...


A good sub shows up early and never leaves the job site till his work is done !! Pack a sandwich and fill your thermos with coffee !!!


----------



## tileman2000 (Feb 14, 2011)

I've never heard of a GC providing tools to their subs. That's just unheard of. As far as the money goes, that needs to be worked out and agreed upon before hand. Sounds more like an employee situation if you are providing tools, setting the pay and dictating the time schedule. Give him an address, let him or her do their work and pay once the jobs are completed. That's all I do when subbing out work.


----------



## Framer53 (Feb 23, 2008)

I supply specialty tools that my subs do not have


----------



## blacktop (Oct 28, 2012)

Any sub without there own tools Is a crack head IMO.


----------



## Tom Struble (Mar 2, 2007)

i often leave the jobsite before my work is done..:whistling


----------



## CarpenterSFO (Dec 12, 2012)

Are you their boss or their customer? Not the legal question but the common sense one.


----------



## Driftweed (Nov 7, 2012)

Maybe if I define the job it will make more sense.

I will be hiring fir bathtub/countertop reglazing. This requirez an hvlp gun, pps cups, chemicals, scraper, cleaning pads, full face respirator, suit, gloves, rags, masking supplies. All of which fit into a mobile job box for effeciency. 
The "employee" will sign out the job box for the day, pickup work orders, and go do them. At the end of the day, he/she will return the job box.

Each tub takes 3 hours to do max.


----------



## CarpenterSFO (Dec 12, 2012)

Employees.


----------



## Driftweed (Nov 7, 2012)

ok so they would be employees. That makes me responsible for withdrawing taxes, etc... correct? even on piece work? I like to just say "You did ten tubs this week, here's your check." trying to keep the math simple, but I guess I am over thinking it.

Payroll company it is then. yay for paperwork.


----------



## tileman2000 (Feb 14, 2011)

It's really up to you whether you want employees or 1099 them as subs. If subbing out the work, you shouldn't be supplying anything as far as tools and safety equipment. If I was a sub, I'd be embarrassed to show up on a job and not have every possible tool needed.


----------



## Driftweed (Nov 7, 2012)

Thats what the job box is for. Everything you need is in there. So no need to worry about missing stuff. That's why I'll keep it stocked. 

I dont even want missing equipment, sundries to be a part of the equation.


----------



## kiteman (Apr 18, 2012)

Well, maybe they could rent the box from you each day.


----------



## Anti-wingnut (Mar 12, 2009)

tileman2000 said:


> It's really up to you whether you want employees or 1099 them as subs


No it's not. There's no choice, your either an employee or you're a sub. As the OP lays out, his people are employees


----------



## tileman2000 (Feb 14, 2011)

Anti-wingnut said:


> No it's not. There's no choice, your either an employee or you're a sub. As the OP lays out, his people are employees


I meant as a business owner you have a choice whether to have employees or not. And following this whole thread, he went back and forth between employees and subs.


----------



## BThomas (Apr 21, 2013)

Drift - If you want subs like you say
You need to "train" them as to what and how you want things done.
You need to say - I pay *** per tub
You say you need this this and this tool.... Until you can purchase your own You can rent mine for *** per day.
You can not set the schedule. You give them a list of the jobs and have them call the customer and say " I am Joe Shmo from ABC co and need to schedule a time to redo your tub. I have available times of .......
You must pay enough per tub to make it worth it for the "sub" to pay his own insurance, buy his own tools and equipment and be able to squeeze in a fourth tub in a long day if he hustles. If he / she can't make more than hourly pay there is no incentive to work for you.
Of course he needs his own transportation and related job costs all of which should be able to be paid if you pay enough per tub. He should also be able to make enough money to pay for health insurance and put some away in a pensionn fund.
With a sub you loose some control. If you want total control than you want employees not subs.
Many years ago I was a sub installer for a storm door co. I was paid X per door. Most of the other installers installed 5 -6 doors a day. I was and still am a hustler. I installed 8 - 10 doors a day. 5-6 paid the bills but doing 8-10 made me money.
If I was limited to 5-6 doors I would not have worked for that co. There would be no incentive which , I believe, all good subs look for and need.
Bill T


----------



## ckccorp (Apr 19, 2014)

*More questions*

Sell them the box then classify them as sub. you could always buy it.

I have a stupd question, i have a business proposal he wants me to hire him as 1099, he has his own tools vehicle etc, i want to pay him piecework, or lets say per job, i go over him the works, a day after he does it. i go over him again for another, he does it. He does not have a license and he has his own crew of 2. I have always did the employee thing, hired subs with license, but im thinking of piecework now because this guy is ridiculously cheap. Is this even legal? What are my legal choices for piecework? Can I hire this guy as a sub/1099 even without a license? The job will run materials and labor for 5k.


----------



## BThomas (Apr 21, 2013)

CK
Where are you? Each state and even counties within each state have different requirements as far as licensing.
I am in Orange county , NY and you do not need to be licensed to sub as a carpenter. However in several of the surrounding counties you do need to be licensed as a carpentry sub. In all counties you do need to be insured. Liability, disability and workers comp. 
Bill T


----------



## ckccorp (Apr 19, 2014)

BThomas said:


> CK
> Where are you? Each state and even counties within each state have different requirements as far as licensing.
> I am in Orange county , NY and you do not need to be licensed to sub as a carpenter. However in several of the surrounding counties you do need to be licensed as a carpentry sub. In all counties you do need to be insured. Liability, disability and workers comp.
> Bill T


I am in los angeles county, CA, the job is a single remodel plumbing electrical windows small painting sometimes a small fix in the roof. I could buy those for him and deduct to his paycheck. but i guess as what you have said, it would then require a license.


----------



## BThomas (Apr 21, 2013)

CK
A sub is responsible for the work they do and if licensing is required in your area than the responsible person would need to have the license. If the installer does not have a license and something goes wrong than you are on the hook and have no recourse against the sub. You would also be required to provide workers comp on the sub and any of his employees if he does not carry it. I don't know the rates out there but by my carpentry is 17%. This is a big nut and adds up very fast.
Have your guy get a license and make sure you have copies of all his insurance and make sure you are named on his policies as also insured.
Bill T


----------



## ckccorp (Apr 19, 2014)

BT, it would be much easier for me to hire him and add "bonuses" than him getting his license. He is not really interested in getting one. Bad thing is, if I hire him as employee, it would be close to as what i pay with employee route. 

But still looking for workarounds with CA GCs on what they think or maybe i could get some more opinion as to how this could work with CA law. I am not even sure what constitutes as a "sub" and if they really need a license for this. It is more like the "sub" post of the door above but this will be more than one trade, it does qualify as a sub because i dont control time tools and vehicles. I only have had subs if its only one trade, have not really made a deal on this kind. My workers comp is way above that bc the business is still 3 months old.

I meant, your example


----------



## BThomas (Apr 21, 2013)

CK
Even if your guy is an employee you will need to have a license. You will need to hire licensed plumbers and electricians also. CA is , I believe, One of the stricter states when it comes to licenses.


----------



## ckccorp (Apr 19, 2014)

BThomas said:


> CK
> Even if your guy is an employee you will need to have a license. You will need to hire licensed plumbers and electricians also. CA is , I believe, One of the stricter states when it comes to licenses.


BT, yes i do have a license as GC, the issue i am trying to resolve is drawing the line of a sub needing a license, or piecework. I guess I could draft a piecework contract like what you did on your doors, i am not sure if you had a license then. If i let them do piecework, what do i need for it to be legal? how about his crew, what do i do with them? can i get a sub that is a group?


----------



## Tom Struble (Mar 2, 2007)

:blink:..his crew is not your problem..unless he's not a legal sub..in that case it is..


----------



## ckccorp (Apr 19, 2014)

Tom Struble said:


> :blink:..his crew is not your problem..unless he's not a legal sub..in that case it is..


Tom, I am trying to see what is the line between "sub" or a piecework job, as he does not have license. If he could qualify as my sub, that will be the ultimate answer to my question. :clap:


----------



## RobertCDF (Aug 18, 2005)

ckccorp said:


> Tom, I am trying to see what is the line between "sub" or a piecework job, as he does not have license. If he could qualify as my sub, that will be the ultimate answer to my question. :clap:


Every ahj is going to have their own rules. The one I primarily work in only cares if my electrician, hvac, plumber, and gas guy are licensed, pretty much everything else doesn't matter.


----------



## Anti-wingnut (Mar 12, 2009)

That almost certainly isn't the AHJ's call, but state licensing requirements.


----------



## RobertCDF (Aug 18, 2005)

Anti-wingnut said:


> That almost certainly isn't the AHJ's call, but state licensing requirements.


But the ahj will be the one deciding on things that aren't regulated at the state level... that's what I'm trying to get across.


----------



## Astrix (Feb 23, 2009)

United States IRS uses a 20-point evalution to determine if worker is an employee or sub. You don't need to score 20 out of 20; it goes based on which side of the scales carries the most weight after ALL the points are considered, and then that's how the worker will be labelled.

So, you could be supplying tools, vehicle, insurance, and scheduling jobs; but depending on all the other factors, the worker might still turn out to be a sub in the eyes of the IRS.

Hope you find this link to be helpful info:
Subcontractor - or Employee? IRS 20-point test

After answering yes or no to all 20 points, do your installers fit in more on the sub-side or more on the employee-side? If it turns out to be an even 50-50, then IRS will label them employees.


----------



## RH*carpenter (Mar 24, 2014)

The definition of a subcontractor is given in the lien law here in Arizona. The lien laws state that those who furnish labor, materials, or equipment for the construction, alteration, or repair of buildings and other structures shall have a lien whether the labor, materials, or equipment were furnished at the instance of the property owner or his agent. It then states that all contractors and subcontractors are agents of the property owner. The contractor licensing laws in Arizona state that contractors and subcontractors must be licensed to act as agents.

So a subcontractor is an agent who has a contract with the property owner. One cannot act as an agent without having a contract to do so. So a plumbing contractor who is a subcontractor has a contract to order the labor, materials, and equipment for a plumbing project.

The license is to be issued in the name of the person, firm, partnership, corporation, association, or other organization that applied for the license.


----------



## TNTRenovate (Aug 19, 2010)

Astrix said:


> United States IRS uses a 20-point evalution to determine if worker is an employee or sub. You don't need to score 20 out of 20; it goes based on which side of the scales carries the most weight after ALL the points are considered, and then that's how the worker will be labelled.
> 
> So, you could be supplying tools, vehicle, insurance, and scheduling jobs; but depending on all the other factors, the worker might still turn out to be a sub in the eyes of the IRS.
> 
> ...


1 out of 20 and an agent in a bad mood can convert a sub into an employee. It's purely subjective.


----------



## hdavis (Feb 14, 2012)

I wouldn't touch this question. There's Federal Tax law, but also Cali employment law covering what is and is not a sub, then there can be additional laws related to licensing that can come into play at both the state and local level. Call a lawyer and let THEIR head explode trying to figure this one out.

Edit: And possible state lien law, as above.


----------



## CQC (Aug 5, 2013)

I believe the IRS would consider them employees since you are exercising both behavioral and financial controls over them.


You may want to review this http://www.irs.gov/taxtopics/tc762.html


----------



## TNTRenovate (Aug 19, 2010)

hdavis said:


> I wouldn't touch this question. There's Federal Tax law, but also Cali employment law covering what is and is not a sub, then there can be additional laws related to licensing that can come into play at both the state and local level. Call a lawyer and let THEIR head explode trying to figure this one out.
> 
> Edit: And possible state lien law, as above.


State and Federal are separate. Here the state won't report to the federal and visa versa. But I hear what you are saying. There are many variables and things at play.

Employment Lawyer and CPA are great counsel for these types of questions.


----------



## tombeck (Nov 24, 2012)

EMPLOYEE - absolutely


----------



## tombeck (Nov 24, 2012)

A "subcontractor" should be a separate company specializing in a different trade/service other than that of the prime/general contractor, otherwise it's typically simply a tactic to avoid paying appropriate labor burdens on the part of the prime contractor.


----------



## TNTRenovate (Aug 19, 2010)

tombeck said:


> A "subcontractor" should be a separate company specializing in a different trade/service other than that of the prime/general contractor, otherwise it's typically simply a tactic to avoid paying appropriate labor burdens on the part of the prime contractor.


Not true. Roofers contract roofers all the time. Just as one example.

I may be a tile contractor that has too much work and I want to contract another tiler to help get me caught up.


----------



## tombeck (Nov 24, 2012)

Yes. This is true. The practice of misrepresenting employees is absolutely rampant in some states. Especially east of the continental divide.

However, that doesn't make it right.

It is quite obvious that most residential contractors in Colorado, be it roofing, framing, what-have-you, practice this unscrupulous act, either out of ignorance or blatant greed.


----------



## TNTRenovate (Aug 19, 2010)

tombeck said:


> Yes. This is true. The practice of misrepresenting employees is absolutely rampant in some states. Especially east of the continental divide.
> 
> However, that doesn't make it right.
> 
> It is quite obvious that most residential contractors in Colorado, be it roofing, framing, what-have-you, practice this unscrupulous act, either out of ignorance or blatant greed.


My point was you don't have to be different or specialize to be a contractor.


----------



## RobertCDF (Aug 18, 2005)

tombeck said:


> Yes. This is true. The practice of misrepresenting employees is absolutely rampant in some states. Especially east of the continental divide.
> 
> However, that doesn't make it right.
> 
> It is quite obvious that most residential contractors in Colorado, be it roofing, framing, what-have-you, practice this unscrupulous act, either out of ignorance or blatant greed.


Yup, I see a lot of it here in Colorado.


----------

