Scabs always are the enemy of those who are protecting a meal ticket. In this environment there is plenty of room for companies hiring themselves out as a field crew but they must work under the supervision of the responsible surveyor. No different than sending your own crew out but would have the benefit of keeping good people working during slow times, when you would need to let your own crew go. To much control and protectionism by those who have self serving interests, it has gotten out of hand. Do what is needed to keep out of trouble with the IRS and let the board handle those who are in responsible charge and let people work who will and want to.
jud
There are plenty of survey companies where the licensed individual sits in the office and the crews go out and set up and run the traverses. I see no difference whether these crews are subcontractors or employees. It's all about back and forth communication between the crew & the L.S having the L.S. make all survey decisions.
If you want to keep good people working, then "employee" them as everyone else does, even on a part time basis. I have been told by a surveyor who uses "independent" contractors that his costs are the same as if he were to employee them. I find that hard to believe. He is not paying the overhead costs of the employer cost of FICA, is not paying for workman's comp or disability insurance or unemployment insurance that we all must pay. He does not have the overhead costs of vacation, sick or holiday pay.
Not only that, he is putting the independent contractor (his former employee)in violation because as a supposed independent contractor he is an unlicensed individual offering surveying service.
As has been previously said, IRS says if you are supervising, the individual is an employee and not an independent contractor.
> He is not paying the overhead costs of the employer cost of FICA, is not paying for workman's comp or disability insurance or unemployment insurance that we all must pay. He does not have the overhead costs of vacation, sick or holiday pay.
I have been both a subcontractor and an employee for a lot of engineering work that involves surveying. When working as a Subcontractor, I charge about double (per hour) to cover my additional self-employment tax, equipment, liability & insurance costs.
It seems silly for for a company to go through the additional paperwork to make me an employee when they only need me for a few days per year when things get busy; so they would rather pay the higher hourly rate and have me use my own equipment.
Perry and Jud,
Thanks for enlightening me. I'm a solo operator and was thinking about hiring someone to help me out as I have taken on too much work lately.
Now with your guidance,I see that I can hire this unlicensed person as an independent contractor, give them a robot and gps and send them off to do some of my field work.
This is great, I no longer have to pay overtime even though one of the jobs requires onsite construction staking 6 days a week, 14 hours a day. Wow, what a savings.
And if he gets run over by dump truck while on the job, oh well, sorry for him but not my problem. I don't have to pay workmans comp so maybe I'll have some money saved to send him a get well card. Maybe buy the wife and kids a dinner or 2 just to get them through the rough time.
And if he causes an accident while driving between jobs. I can't imagine that his auto insurer will come after mine, and mine will refuse to pay, putting the liability directly on me? Can you? I mean the nerve of his auto insurer claiming that I was an employer. I mean, I have a contract with the guy, so there, he's a contractor, see?
And no more unemployement insurance costs. Wow, fantastic. Especially since I've never heard of a disgruntled subcontractor filing an unemployment claim against a contractor. I mean, there's no way the unemployment people would investigate and find that I've circumvented their laws, right? 'Cause you see, I've got a contract with the guy, makes him a subcontractor not an employee, right?
Ohhh, the money I'll save. Maybe I can start competing with the lowballers.
Thanks, I do appreciate the educating I have received here. Isn't this board great?
I'm living the dream...
I think what Jud is saying and a practice I have seen AND am OK with is firm A is slow, firm B is overloaded, firm B 'borrows" a crew from firm A for a week or two AND makes the professional decisions for the borrowed crew. At the end of the project, firm A sends firm B a bill for the crew. All the while firm A is still paying the taxes, etc. on the borrowed crew AND they remain employees of firm A.
This is not much different than large multiple office firms shuffling crews from slow offices to busy offices on a temporary basis, the offices bill each other, BUT your professional supervisor changes.
I have also hired from temp labor agencies on a temporary basis, the employee is employed by the temp labor agency BUT you are their supervisor, I see no issue with this either. All taxes, etc. are paid by the temp labor agency. Satisfies the IRS and should satisfy the BOR since you are supervising.
These are just examples of how "contract" employees can work inside the law, of course there are ways to get in trouble too, BUT saying contract employee shouldn't necessarily be cause for red flags to wave.
SHG
clearcut
sarcasm well noted. However, can't you also subcontract "above-board" and get some help for a while? Make sure and oversee the subcontractor's work?
I have thought many times about what I might do if I lost my job in these tough times. One thing I have thought about is going to survey firms I know and am familiar with, and telling them that if they are ever overloaded, to consider hiring me. For a whole job, for a day to fill in, to work on a crew, or to run a crew for a particular job. Make the rounds and see if I can bring in some income and put food on my table.
I am not sure that means that I will automatically do substandard work or be some kind of scab.
As in all things employing an independent requires some critical thinking and common sense, appears that you have been cheated in that department by depending on others and rules to protect you. If that is the case as your above post indicates, don't come out of the box you have used for guidance and security, not ready yet to enter the ranks of those who use courage with wisdom to survive in the world our government has temporarily created for us.
jud
Excellent stuff, Clearcut.
> I know of 2 unlicensed individuals who are "subcontracting" to licensed individuals and are performing much of the research and analysis along with the field work. The licensed individuals are retiree's who see it as easy income to have someone do their work and all they have to do is sign the plats. Its criminal. It is the result of an environment that is fostered by those who mistakenly believe that unlicensed individuals can be seen as independent contractors, thereby allowing the unlicensed individual to pursue establishment of themselves as an independent business.
I would tend to disagree with this blanket statement, however. The problem isn't with the subcontractor, the problem lies with the "licensed individual" who thinks they don't have to provide direct supervision.
JBS
You can subcontract labor as in any business, but there are varying interpretations from state to state as to whether the firm you are hiring must be licensed. Some BOR's rules (or surveying laws) will not allow a firm to offer to do Cad or field work unless licensed. Even within the state, the state board and Attorney General may have differing opinions. There is also the IRS regulations with regards to subcontractors to comply with. To avoid potential problems, I will only subcontract to firms who are licensed and I rarely do that. I prefer to just hire someone on a temporary basis.
If you were an earthworks contractor building a berm in the middle of nowhere, who would you rather have staying at your camp and helping getting the job done?
- An unlicensed experienced construction surveyor working as a sub-contractor
- An inexperienced green dude working for a licensed surveyor (busy at the office)
If the sub-contracting company is legit, and not dealing with legal stuff (boundaries, etc.), I don't see any problems.
There will always be independent specialists in most businesses.
It's all about customer satisfaction.
> As in all things employing an independent requires some critical thinking and common sense, appears that you have been cheated in that department by depending on others and rules to protect you. If that is the case as your above post indicates, don't come out of the box you have used for guidance and security, not ready yet to enter the ranks of those who use courage with wisdom to survive in the world our government has temporarily created for us.
> jud
Well Jud, perhaps I've been cheated. But, at least I'm not the cheater. Hopefully that counts for something.
Again, I learn from this. I've learned that understanding and obeying the law, and running an above-board honest business is equivelent to not having common sense.
I sorta suspected that, thanks for confirming.
Frankly, we have more problems in our industry caused by behind-the-desk surveyors performing boundary surveys than we ever have with subcontract crews. We'll never hear any arguments about that, though. Too many guilty parties.
> It's all about customer satisfaction.
Agreed. And, free trade.
JBS
I ask you, why doesn't the "experienced unlicensed subcontractor" not have his license? Because he can't pass the licensing test.
But go ahead and trust him. He's got 30 years experience, (or was it 1 year of experience 30 times?) He probably has a thorough understanding of practical applications and it is entirely possible those areas of knowledge required to pass the licensing exam that he is lacking in really don't apply to your job anyways. Plus, he's cheaper than a licensed guy, what a bonus! That alone is a deal maker huh?
As to the green dude working under a LS. Hard to say what he is capable of, but if he doesn't know what he needs to be doing and isn't fast about it, then, well, the LS would be either out there himself the next day or a new LS would be employed. There's plenty of competent licensed ones out there looking for a phone call.
I agree with you. I've been a part time CAD sub for 20 years. There are alot of small staffed or solo surveyors out there that only need 5-10 hours a week and have had no success keeping someone on staff. The LS still reviews it just like it was under his roof.
> I ask you, why doesn't the "experienced unlicensed subcontractor" not have his license? Because he can't pass the licensing test.
Why does the "experienced unlicensed subcontractor" need a license? The "experienced licensed surveyor" who hires them does. Are you saying that the "experienced licensed surveyor" needs to be doing the work that the "experienced unlicensed subcontractor" is doing? You see, it has nothing to do with "who" is doing the work. What is important is that the work is "supervised" by a licensed surveyor.
> But go ahead and trust him. He's got 30 years experience, (or was it 1 year of experience 30 times?) He probably has a thorough understanding of practical applications and it is entirely possible those areas of knowledge required to pass the licensing exam that he is lacking in really don't apply to your job anyways. Plus, he's cheaper than a licensed guy, what a bonus! That alone is a deal maker huh?
Yet, we trust our party chief who has the same experience (or less)? What's the difference when both are properly supervised?
> As to the green dude working under a LS. Hard to say what he is capable of, but if he doesn't know what he needs to be doing and isn't fast about it, then, well, the LS would be either out there himself the next day or a new LS would be employed. There's plenty of competent licensed ones out there looking for a phone call.
Yet, the green dude is no better than green whether he's working for the subcontractor or directly for the licensed surveyor. He's still just as green and just as in need of direct supervision.
JBS
Seems to me once someone opens up a business, one has to conform to all the laws rules and regs pertaining to that business, including employment laws as well as professional/technical standards.
What happens if said "subcontractor" goes out on a site and gets hurt?
What happens if said "subcontractor" makes an error?
What happenswhen the "subcontractor" doesn't declare his income and gets caught?
Whose insurance will cover such eventualities?
Clearcut misses a lew points
Now with your guidance,I see that I can hire this unlicensed person as an independent contractor, give them a robot and gps and send them off to do some of my field work.
You would be violating IRS laws. When I subcontract, I use my own equipment. (one of the requirements of subcontracting)
This is great, I no longer have to pay overtime even though one of the jobs requires onsite construction staking 6 days a week, 14 hours a day. Wow, what a savings.
As stated before, My subcontracting rate is about double my hourly rate as an employee. (I handle my own vacations)
And no more unemployement insurance costs. Wow, fantastic. Especially since I've never heard of a disgruntled subcontractor filing an unemployment claim against a contractor. I mean, there's no way the unemployment people would investigate and find that I've circumvented their laws, right? 'Cause you see, I've got a contract with the guy, makes him a subcontractor not an employee, right?
When subcontracting, I am subject to %15.5 self-employment tax. I also provide my own liability insurance and workers comp.
And just for the record, I have never received any sick time, vacation pay, paid holidays or collected any unemployment income in the 21 years I have worked in the surveying field.
Can Surveyors Legally "Subcontract"? JB clearcut
JB:The IRS and the BOR are unrelated agencies. However, one of them may use evidence
obtained from the other party. For example, a party chief fills out an application for a PLS license. His boss, knowing the party chief will undercut him, denies the
party chief's experience to the BOR. The party chief sends a copy of the IRS 1099
form he received from his boss.
Clearcut: My nephew lives in California and says they tax you to breathe. It is
the same with the IRS; they and Obama would love to have all employees instead of
contractors. When you and an employee decide to part ways but he works as a
contractor, then you both get great tax breaks (which the Federal or California
government do not like).
I had a party chief go to California to work on a pipeline. He stayed two years
and got registered. He said he got a 50% on the exam and got his California license.
After two years, he came back to Kentucky. The California franchise board got the
rls list. He received a letter from them saying he owed $3k in taxes because
surveyors in California made $30k per year and the tax is 10%. He wrote back from
Kentucky saying he had not worked in California for a year and a half. They added
a penalty to the $3k. I asked, "Jimmie, they only pay $30k per year in California?"
Yes, two issues. Issue 1: Is "subcontractor" viewed as an Independent Contractor or as an Employee in the eyes of the IRS and Labor Board. For IRS, it is pretty clear cut. IRS Guidance
Follow the qualifiing conditions shown for independent contractor or employee to figure out the appropriate status of the relationship regardless of the title of subcontractor.
Issue 2: requirements of supervision for Land Surveying as per the specific State licensing board where the surveying activity may take place.
The requirements of independent status of the "subcontractor" in Issue 1 may cancel out any practical use of non-employees in order to comply with the Supervision requirements of Issue 2.
