@anon82274079
Its not our job to make sure subs have workmans comp. I get what you are saying, and you are right from a moral standpoint, but legally, he don’t need to do that to show they are subs.
All you need is a tax id, and the contact info for the company you are subbing out to.
Thanks for the kind thoughts Tory. For all to learn from here are my “mistakes”- I required my subs to get comp if they were going to use a helper and make me additionally insured. They work solo but they have to have a policy still. It won’t cover them but it will cover anyone they bring to a job site. The sub has to bring a “distinct” service. I can sub out roller shade cleaning but not window cleaning services. The guys had my shirts and “don’t compete clause” …cant do either. These are the mistakes made. I guess lastly I should have taken my understanding to State Fund and gotten a stamp of approval. I did consult with a lawyer on the 3 page agreement I had with the subs but guess he has something to learn and tell the next guy. Updates after I talk to that lawyer and a service that goes to bat in situations like mine.
This is correct. Subs that are owner operators do not need workers comp in CA
Those are the mistakes they SAY you made Paul.
Thats all a load of crap they are throwing at you.
Just because they wear your shirts don’t make them your employees. You can explain customer perception. No competes are standard for subs. They can’t tell you that you can’t do that because an insurance company weather government controlled or not can either kiss your right or your left butt cheek.
You are right about the stamp of approval thing but see what they do is they believe everyone is robbing them, and you need to prove your innocence otherwise you are caught red handed.
Well you know what? Maybe they should include an extremely detailed outline as to how we can legally use subcontractors. Because every dang year it changes and depending on the person who does the audit, it will change again.
That is absolutely wrong, because the burden of proof should be theirs and NOT yours.
Who cares what anyone says appeal it as far as you can go.
I don’t care if they brought the fine down to 1 penny, its the principle that you are fighting Paul and seriously…someone who is part coward may try to use this against you somehow. Don’t go out like that Paul.
Anything at all I can do to help man, you already have my number. You know you got that coming Paul.I got you.
Thanks Tory. I really appreciate the support. It’s the “slow season” so I have some time to talk to attorneys and others and see what we can get done. I’ll post the outcome and appreciate your sentiments.
Sue 'em! Just kidding, sorta. I got audited by the locals one year. Got nasty letters that my “hearing” was such and such a date. Took my paper work, sat down with a total jerk in a city office. He shuffled through my paper work. I proved a business loss for the year. Simple tax forms properly filled out by my CPA who knew the RED FLAGS. Guy looks up, throws my paper work across the desk at me and says,“YOU CAN GO!” End of story, end of city audit. Did not get another business license until I started my present company. And with all the advance taxes they want and the oncoming property tax for my new equipment and a 14 per cent social security tax, I may just close my doors; don’t know if this crap is worth the hassle. Then I’m told I can get a buck or two bucks a pane to do a store front. Let 'em stay dirty.
It gets tough brother, but turn that word hassle into Hustle, and sooner or later things will change.
Yes…you got it.
Thanks. That’s my plan. Just thought I’d ruffle some feathers. Don’t have employees yet, so don’t yet have the WC hassle. I do have the tax hassle though. 
Charge enough to cover it 
Looks like I’ll move guys to percentage. Landing on 42% for them and they have their trucks/fuel/equipment/supplies to pay out of that. Maybe net 35-38% which should calc out to about $30 plus per hour net. You guys doing percentage what percentage do you give the workers? Do they have own veh/equipment ?
30% for me Paul and yes they have their own equipment
Wow…I think that means I need to charge more because 30% would work out to maybe $25 an hour and after they paid their expenses they’d have $20 an hour.
Expenses including taxes would be less than 20
…still awesome pay for a job cleaning windows if you ask me.
@anon46335951
not if they have their own stuff too.
@Blue_Ocean_Window_Cl
I used to do mine based on the job. Commercial jobs don’t get 30% forget it. I’ll have them bid it and if they are way outta line, I’ll tell em “look it pays …x amount…you in or not?”.
Unfortunately you end up turning them into window cleaning whores going to the highest bidder.
So you concluded you will still use sub contractors? Just need to make some small adjustments like pay rates and losing the company shirts?
It would be helpful to others to hear what you learned.
I guess i figured, 25% alone goes for taxes if your self employed.
If a guy subcontracting makes $25 per hour, pays taxes, supplies own equipment, insurance, fuel, etc, hes got to be making under $20 easily?
Maybe its just where we each are from, employees get that pay here.
You’re probably right. I never really cared to do the math on it because bottom line, I’m losing bids left and right…contracts left and right to guys who are about half of what I charge or more on some gigs.
And the work is not bad either!
Reason why I never did the math is because I simply can’t raise prices not by a long shot.
I’m lucky to get and keep what I do right now.
What worked years ago, don’t even come close to working now.
I had a lady book me for a ccu on a 10k sq. ft. house, I walked it. Was going to take 3 full days with 3 men working sun up to sun down. My real number was at roughly 3600. I told her 2200. She flipped out and was almost offended. Then I got offended.
This whole thing is stupid. I know someone will go and do it for a grand and probably do a good job too. 8 years ago I’d get 5k off that job and they wouldn’t bat an eye.
I will never understand what is going on. Prices for everything has gone up. But they are shocked when we have freaken bills to pay before we are able to go to the grocery store.
GL insurance costs me 130$ a month for 1 mil/2 mil aggregate. 1mil commercial auto 160. Gas, depends can’t be more than 20 bucks for the job per day back and forth, equipment add 2 bucks I guess, lets call it 800 bucks a month for all of those items.
Thats only 26 bucks per day out of that month.
Mon-Fri only, thats 40 bucks per day to cover those expenses.
Even if it was only 20 per hour he’s still making profit after his second hour of work if he were getting hourly. If he’s got a minimum charge of 150 like I do, he’s going to make 130$. It aint much but if it’s percentage and not hourly, they have incentive to hurry up and get out with the understanding nobody gets jack unless the client says its good to go.
They can rake in 300 or more per day easily if they are good enough. If I were making that today I’d be happy.
On the sub or not issue I’m still researching. I will ask State Fund to “approve” the arrangement possibly once I get everything they want in place so I don’t get surprised at audit time. They may never approve it I suspect because the guys are not doing “distinct/like work.” I can sub out blind cleaning but not window cleaning. If I can get past that hurdle and the guys have there own comp coverage this might fly. I’m also thinking that I don’t want guys out there working without coverage of some kind, paid for by me or them. I would hate for them to be hurt and not have some coverage. Plus if they got hurt without coverage they in all likely hood would file a suit against me even though we had an " agreement." I’m now on a 40% program and will see how that works. The guys won’t work now for $24/hr as they have everything they need to run their own businesses. So 40% of a $100 job =$40 for one hour of work if they are efficient. 1.25 hours and they still have $32/ hr. But, they have insurance/vehicle expenses/supplies/fuel/value of their time to and from the job/taxes/admin costs. What they end up with depends on their operation…maybe $25/hr? For my operation if I pay a guy $40 I’ll have $60 left (60%) and out of that I will have to pay 30% comp, 8% taxes, 4% liability insurance, 4%+ admin costs, plus the 2% surprise expenses that pop up and that leaves me with 10-15% profit. I spent 8 years working to build something and given that stuff like a surprise $50k comp bill has to be dealt with on occasion (or the $10k tab I paid years ago for scratching some glass) do I want to be content with 12% profit? That’s a lot of risk, stress, 50-60 hour work weeks, and all of it could be wiped out in one lawsuit. So, raise the price to $150 for that one hour job and then I’m good but like Tory has stated their are guys out there doing it for $50 (not making any money but it will feel like it until they wake up and do the numbers) so one has to stay competitive, find the people who will pay at these rates, avoid the angies list and groupon crowd.
