Is paying piecework feasible for electricians? I think I could solve a lot of my problems by paying by the piece, but paying by the piece might be good for painters, drywallers and door hangers, electrical piecework seems kinda fuzzy.
It seems no 2 electrical tasks are the same, maybe in new houses piecework would be fine, and maybe commercial TI, but all other electrical work seems to be custom, one of a kind....
The Service guys use Flat Rate Books to pay by the piece, the technician knows in advance how many hours he's going to get paid for, so piecework is present in our industry.
Mahlere, you're confusing piecework with sub contracting. They would still be employees and have taxes withheld, etc.
I found this description of piecework online:
"Piecework, work for which the laborer is paid on the basis of the amount of work done. The system is best adapted to standardized operations in which quantity is preferred to quality. Its advocates maintain that it pays the worker according to his ability. Its opponents argue that it tends to pay the best worker what he would receive on a time basis, while other workers receive less than they would by the hour and that it forces the pace of work. In the United States the 1949 amendment to the Fair Labor Standards Act in effect required that pieceworkers be paid at least the minimum wage."
Here's a very interesting presentation on piecework:
It does not fit the IRS definition of self employed person, no 1099 is required. An employee paid by the piece is still an employee. As far as the "workers comp problem", my comp premiums are a percentage of what I paid my employee. If I pay him $100, my comp premiums are $14.
I didn't expect the thread to head in this direction, questioning the legality of piecework, it is most definately legal.
The statement that "true" piecework is sub contracting is not true. I defy anyone to provide evidence that supports that statement.
my point was to make sure that you and I were talking about the same thing.
we pay that way. the only way it works is to have the same people on the job from start to finish. essentially they will get a set rate for that job paid out as they progress.
for example, you can pay $20 per outlet or $20 per $100 revenue. If your outlet is $100, you can pay them $10 per outlet the week that they rough, and $10 the week they finish. Or you can add up all the work they produced for a given week and pay them based on that.
The only way to do this on TI or installations is to have set unit prices for everything that is going in. These prices can be particular to that job, but they must be determined and known. If you bid a project per opening, this will give you the unit price you need.
The key is to give the mechanics all the information as to the prices per item. Let them figure out how much they want to make.
Personally, i disagree with Iwire, i'd rather take a job this way (heck as contractors we take every job this way). The way I see hourly rates is that the mechanic and the contractor are going in different directions. The way for the mechanic to make more money is to work slower and get OT. This causes the contractor to make less.
By going with a piecework type setup, the mechanic gets rewarded for getting more done, not by putting in longer hours. This lets the contractor make more money. kind of a win/win.
for service work it's even easier to pay this way.