Employees or subcontractors.

W2ell, paying a "sub" hourly is just paying an employee. A subcontractor will have a contract and the same labor burdens as the prime contractor, meaning that the overhead and labor charges will be no less.

The ONLY reason to use subs is to avoid paying the labor burdens. There is no other reason.

TomB Said: Good advice Builderr & Old School....

The ONLY reason/rationale behind playing the sub-game is for the unscupulous contractor to avoid paying appropriate labor burdens. Plain & simple. ;)

I don't agree.

I hired my first employee back in the early 80's. I've probably spent 1000 hours interviewing employees and probably 10,000 hour babysitting them.

Now, I only use subcontractors. I'd much rather pay a guy $35 per hour as a sub than hire a guy at $5, 10, 15, 20 or any amount. I'm done with "employees". You can have them. I want independent minded guys, that have all their tools and I will only hire them on a fixed fee basis.

I'm old and tired and this is the easiest way I've ever made my money. Why should I be forced to baby sit "men". I want strong will, self motivated entreprenurs and those kind of guys don't work hourly for anyone.

Good advice Builderr & Old School....

The ONLY reason/rationale behind playing the sub-game is for the unscupulous contractor to avoid paying appropriate labor burdens. Plain & simple. ;)

This 1099 reminded me of a situation that had happened to me...In my 5th year in roofing I was hired to be a shop supervisor in training....Long story, I was just sent out to roof.

anyways, the owner was a religous person (as he read the bible every morning when I showed up)and said he was behind on his quarterly payments and that he would have to start paying cash to everyone for a couple of weeks (which turned out to be a couple of months until the end of the year.

I recieved a W-2 AND A 1099. Learned my lesson in many ways !!!

What state is that lanny? The State of a Rational Mind?

---In my state there are no shortcuts. If you use subs THEY are required to have written proof of insurance, bonding, and license. YOU have to have the paperwork to prove this or they are classified as employees with all the usual fees. ---I am audited every year. So anyone that gets a 1099 must have the paperwork or they are employees. It is just that simple. ---The feds may or may not find out and add their fines and fees in addition to what the state wants. ---True subs have overhead to be true subs. Thus, they charge accordingly. ---There are no shortcuts unless one is simply lying running things under the table. ---I had a friend that made all of his employees corporate officers in order to dodge the fees. It didn't fly and he paid the piper. Lanny

subs reason i say that is simple. you dont have to insure them and well that cuts overhead alot.

I am all employees. I want control over who is doing my work and dispite the hassles with W/C and payroll taxes I find it to be worth it. I always avoided having employees but the older I got and less inclined and able to spend my days on the roof the more it seemed worth taking the plunge. No regrets. The trick is finding GOOD people and paying them well and not sweating the small stuff. I find that if I don't dwell on the occasional hassle/problem with a worker that I can get good cooperation and good effort. The trick is the right type of person. I have gone through a lot of "roofers" to find the keepers that I have.

Part of working for yourself is getting the necesary paperwork and paying for the necessary insurance and licenses and such. It is much cheaper to do it without it, no overhead, but when the chickens come home to roost, it is not too pleasant.

Well, Ive been at it for some 25 years or so. Started out working on crews that "subbed" from other contractors. They had no insurance. Did that for a few years and then began to "sub" from other contractors myself and hired "employees" to help me out. I had no insurance at the time as there was not enough money involved to be able to pay for it. I started my own business after several years of that and had my own "employees" still with no insurance. A year or so after that i began to sub out my work not requiring insurance as i didn't have any either. Then one day several years ago something strange happened. I woke up one morning and realized i now had a nice business going and if something were to happen i would lose it all. So i did something weird. I went and got myself some insurance. After doing this i learned that if my "subs" did not have proof of insurance then at the end of the year i would have to pay the percentage on their pay also. So from that point forward all subs must have insurance or i will pay less to a crew without insurance and i will cover them myself. Cost the same either way. So to make a long story short "er" over the years i have gone from employees to subs with the main reason being if i wanted to babysit a bunch of grown men all day every day i would get a job at the psycho ward. lol

Old School Said: Water runs down hill and so do insurance claims. Just wait till you have someone that works for a sub or one of the subs get hurt and have to go to the hospital. If they dont have insurance and they probably arent covered, they will be treated and then you will get sued. The closest one that has insurance will pay and they will pay dearly. The deep Popckets syndrome

I sleep well

It sounds like your liabilities will need a liability so that they can be held liable instead of making you liable! :dry:

Water runs down hill and so do insurance claims. Just wait till you have someone that works for a "sub" or one of the "subs" get hurt and have to go to the hospital. If they don't have insurance and they probably aren't covered, they will be treated and then you will get sued. The closest one that has insurance will pay and they will pay dearly. The "deep Popckets" syndrome

I seem to remember something about some states do not allow the sub from a sub argument if the sub is doing the same trade as the prime contractor. GC's can sub roofing etc, but roofers, plumbers electricians etc....the first contract is the fall guy for claims etc.

I might be off on the specifics but Im sure I can find something in the archives. wherever they went.

Seems the Sub thing is gaining in my area. A few of us still have hourly.

There is a Paper Contractor just moved in around the corner from me. Swears he has insurance.... or his subs do. Every word out of his mouth has been a lie so far.

Most of the other's with subs are in reality 1099ing their employees. I hired a sub w/ work comp last year. He had the policy but no payroll. Paid his help KASH.

I tried out a sub contractor 3 weeks ago who has done "thousands of roofs" and he's "faster" than the fastest guy on my crew. (Which ain't saying much) When I gave him the news that he did not qualify I simply said that "I am done with trying to re-train people. Good luck"