This question’s from Kenny. “When I pay hourly employees, do I have to pay for travel time?”
“When I pay my employees by the hour, should I be paying them for their travel time between jobs? Do I need to pay them for the ride time between jobs? Exactly what should be included when I’m paying them by the hour?”
My perspective on this is that when you’re paying by the hour, you’re paying for every moment that they work. If you want to be within the law, you’re paying from the moment they show up at your office. You are paying them to drive to the clients’ properties as well as while they are maintaining the properties. And then, you’re paying them at the end of the day to ride back in your truck and unloading your truck. The moment they clock in to the moment they clock out, they’re getting paid.
You’ll see a model in the commercial world where they will write contracts with their employees or contractors, however they set it up, and they will pay for performing the job and not driving. I’m not sure how that fits within the law, but you will see that in the commercial side.
In this commercial model, there will be a driver of each truck and that driver is on the clock from the moment he arrives at the facility to the moment he returns to the facility to unload at the end of the day. But, the individuals in the truck with him are only being paid for any work performed at the shop and job time. They’re not being paid for drive time because their agreement stipulates that they should drive their own cars to every job and they’ll be paid for performing each of those jobs. They can hitch a free ride in the truck if they’d like, but it’s not paid time.
Before you go down a road and follow that type of model, you better be certain you’re double checking that will hold up in your state. You also need to double check that your employment agreements are written correctly and that they will hold up. I can tell you from my experiences in the cleaning industry when I used to own a company with some other partners that there were other companies that were competitors of ours that for years and years had certain payment practices of employees. When one employee became unhappy and sued them, it resulted in settlements for lots of employees.
Something creative around payroll might work out for you for 5 years but that doesn’t mean that when you do get hit, that you won’t have to make up for the many years of underpaying your employees. They don’t just slap your hands with a fine and ask you to do it right from now on. You get a fine and then have to pay a lot of back pay in payroll and taxes! Before you go down a road like that, be very cautious.
If you want to go down a road where you’re paying more for performance, then I would look at an alternative to payroll, meaning an alternative to hourly pay. I would look at piecemeal. I’d look at pay by the job, and then there’s plenty of things to consider even when you do that. You have to keep in mind overtime laws and a whole lot of other things. If you’re going to do something creative outside of just paying straight hourly time, you want to get counsel from somebody that really knows the laws in your state, to be certain that you can sleep each night and not have to worry about someday when you get hit with some big amount of money that puts you out of business. Good luck.
Click To Hear My Answer
Summary of my Answer below (and a bit more info)…
I’m often asked what software we use at my lawn care maintenance company and how we handle payroll.
Likewise, I’ve been asked a number of times if lawn care companies should use QuickBooks.
The audio above is from late 2010 but it answers a number of the questions I’m asked over and over again.
In a future post I will talk more about QuickBooks.
Here are some quick notes about the software setup we currently use at our lawn care company…
1) Service Autopilot runs the company
2) QuickBooks for accounting sync’d with Service Autopilot
3) We do not manage our own payroll or use QuickBooks for Payroll. We track hours, salary and bonuses in Service Autopilot and call payroll into McBee weekly on Mondays before 12 noon. The payroll checks are overnighted to our office. They are stamped with my signature and we hand them out on Wednesday.
4) Some team members use Mailtrust.com for email but most use Gmail. (Gmail checks non Gmail email accounts so Gmail essentially replaces Outlook) I do not like Outlook because it is slow and not accessable from anywhere – so this is my preferred approach.
5) We use MS Word and MS Excel. As Google Docs continues to improve I anticipate we will eventually move all of our documents to the cloud and off individual computers.
6) We backup our internal data (docs, images, etc.) to Mozy.
7) We do not have to back up any of our primary business data as it is all stored within Service Autopilot. SA automatically encrypts our data and handles all the internal and external backups.
8) We still run the desktop version of QuickBooks so we back it up to Mozy. Long term, we plan to move to QuickBooks online. However, the online version of QuickBooks hasn’t been as reliable as it needs to be for us to make the move and it’s feature set is lacking. I’m hopeful the online version of QuickBooks will be an option in 2012.
For new lawn care or landscape businesses or young lawn care businesses I do not recommend QuickBooks. I think something like Service Autopilot is sufficient.
We’ve been running a ‘work from anywhere’ business since the beginning of 2005 when the company was officially launched.
Back then we didn’t have Service Autopilot so I wrote a web based program to track calls, schedules, customers and to do’s. We’ve always been web based and it’s the only way I would run the business.
The only other significant software that I can think of — that we use daily — is the software that comes with Fleet Matrics which is our GPS system we have in 25 of our trucks.
In the audio file above I mention moving away from iPhones and moving to Sprint. We did not make that change. We use AT&T for our phones and Sprint for the air cards in the laptops in our trucks (not all the trucks have laptops).
Other than flowers and mulch we generally stay away from landscape work or hardscape work — so we do not use landscape design software. We do irrigation installs and sprinkler repair but we run all of that through Service Autopilot. At this point our irrigation install jobs are not so large that we need design software.