Contract climbing letter, survey

[ROYCE]

West of Denver, Evergreen, Conifer, Genesee mainly. We do get down to Golden, Morrison and Lakewood for clients who have property down there. I try to stay up in the foothills, in my strikezone ya know. We've carved a pretty good niche for ourselves in this little microclimate.

Ward really nailed it. My conflict with sub-climbers has always been thier biz sense. They don't have thier insurance lined up, they need to use one of my blocks/saws/ropes, scheduling problems, ect. It seems like they just don't take is seriously. By the time we get on the same page I usually just do the work myself. You can be the best sub in the area, if you don't gain the contractors trust they just won't call you again. I would bet that holds true with any plumber, mason, or tile guy too. The whole point of using a sub is they help your situation. I'd regularly use a good sub-climber 15-20 times a year if we have a working relationship. I'd guess if you had 10-12 guys like me, then filled in with some others here and there, you'd have a stable thing going. Good luck, as I said before I think this could really help our industry.

I agree with this second part very much. I contract climbed for a very short time myself. Now as a business owner I would also use a contract climber more often if they had there business stuff in order. Also, I checked with my insurance guy and he said it is a really gray area as to weather or not he is actually your employee. If something was to happen there would be a good chance that in the eyes of the law he would be viewed as your employee. Therefore you are liable.
I really like the idea of a contract climber. You call him up, use him for the big jobs, and if time is slow no need to worry about keeping another guy busy.

 

[Leroy]

Royce- It may vary state to state but here in Colorado the sub-contracting is legit if-
Sub has an LLC
Sub has own GL policy
Sub has to have multiple people file 1099 on them in one year
Not sure about this one but I don't think a sub can drive your trucks

 

[ROYCE]

Royce- It may vary state to state but here in Colorado the sub-contracting is legit if-
Sub has an LLC
Sub has own GL policy
Sub has to have multiple people file 1099 on them in one year
Not sure about this one but I don't think a sub can drive your trucks

Yeah, I imagined it would be different state to state. I know enough guys do it legally so it must be okay in certain states

 

[treehumper]

It's a gray area. From the federal gov website:
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed

Here's a link to the site: http://www.irs.gov/Businesses/Small...ependent-Contractor-Self-Employed-or-Employee

 

[ROYCE]

It's a gray area. From the federal gov website:
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed

Here's a link to the site: http://www.irs.gov/Businesses/Small...ependent-Contractor-Self-Employed-or-Employee

Thats how it was worded to me. If you tell a contract climber when to show up and where, you are his boss and therefore he is your employee. Doesn't matter if he uses all his own gear, has own insurance and so forth. But, I know some places have different rules.
What I could never understand is why is it okay to sub-contact out crane work? I know a lot of us do it. Hire a crane and an operator for a day. Why is this okay and never a problem, yet whenever you mention hiring a sub-contract climber red flags go up?.

 

[rockettree]

West of Denver, Evergreen, Conifer, Genesee mainly. We do get down to Golden, Morrison and Lakewood for clients who have property down there. I try to stay up in the foothills, in my strikezone ya know. We've carved a pretty good niche for ourselves in this little microclimate.

Ward really nailed it. My conflict with sub-climbers has always been thier biz sense. They don't have thier insurance lined up, they need to use one of my blocks/saws/ropes, scheduling problems, ect. It seems like they just don't take is seriously. By the time we get on the same page I usually just do the work myself. You can be the best sub in the area, if you don't gain the contractors trust they just won't call you again. I would bet that holds true with any plumber, mason, or tile guy too. The whole point of using a sub is they help your situation. I'd regularly use a good sub-climber 15-20 times a year if we have a working relationship. I'd guess if you had 10-12 guys like me, then filled in with some others here and there, you'd have a stable thing going. Good luck, as I said before I think this could really help our industry.

That's a nice little territory, I bet you get to work on some nice ponderosa up there.

I definitely don't want to be that guy! I believe it can be a great thing for both the business owner and the contractor if done properly.

 

[rockettree]

Thats how it was worded to me. If you tell a contract climber when to show up and where, you are his boss and therefore he is your employee. Doesn't matter if he uses all his own gear, has own insurance and so forth. But, I know some places have different rules.
What I could never understand is why is it okay to sub-contact out crane work? I know a lot of us do it. Hire a crane and an operator for a day. Why is this okay and never a problem, yet whenever you mention hiring a sub-contract climber red flags go up?.

An employer tells their employees where to be and when. A business owner reaches an agreement with a contractor, no?

As long as fedex gets away with it I think we're in the green!

 

[Leroy]

I really don't think it's that gray even with climbing subs. Two separate entities, one hires another, transaction is reported to IRS. Some of the people that I have worked for have asked me for documentation saying that they are a certificate holder of my GL policy and had me fill out W-9s, others have not.

 

[ROYCE]

It's all fine and good until someone gets hurt or killed and lawyers get involved. Someone has to pay. If you think that someones wife, husband or kids give 2 shits about some agreement you had when their loved one is hurt badly or killed, they don't. Once lawyers get involve everything gets thrown out the window.
All I'm saying is that insurance companies in my area frown upon it. If you can swing it in your area, go for it. I think that it does benefit both parties. However, I can see both sides as well.

 

[treehumper]

Levi, the fact that some don't ask for cert of ins. or have you fill out a w-9 doesn't mean you're in the clear. All it takes is an IRS audit that could lead to a ruling that you are an employee. This leads to them needing to remit the payroll overburden on the income paid. Subsequently it means that certain expenses you claimed as an independent contractor may not be allowable as an employee.

How we transact business does not automatically trigger the laws that govern us in a way that we are immediately notified of violations. It's up to us to be in compliance at all times such that when or if there is an investigation.

Instead the company setting the time it's the sub that would establish that, like rockettree suggested. A crane operator brings his tool, the crane and also defines the time plus will decide how he'll set up and operate.

As for Fed/Ex, check this out click here

 

[tc262]

I run my own business and also contract climb and sub contract my bucket to other companies. Most other companies that I have dealt with have a tough time finding climbers who are true professionals. I've been told by other owners "I can find guys with balls or brains but not both." It's tough to find a guy who climbs and is capable of technical rigging. If you can do both well and show up on time with a big box of rigging gear, you will stay busy and command a premium price.

 

[rockettree]

Levi, the fact that some don't ask for cert of ins. or have you fill out a w-9 doesn't mean you're in the clear. All it takes is an IRS audit that could lead to a ruling that you are an employee. This leads to them needing to remit the payroll overburden on the income paid. Subsequently it means that certain expenses you claimed as an independent contractor may not be allowable as an employee.

How we transact business does not automatically trigger the laws that govern us in a way that we are immediately notified of violations. It's up to us to be in compliance at all times such that when or if there is an investigation.

Instead the company setting the time it's the sub that would establish that, like rockettree suggested. A crane operator brings his tool, the crane and also defines the time plus will decide how he'll set up and operate.

As for Fed/Ex, check this out click here

I need to stay up on my current events!

 

[ward]

It's a gray area. From the federal gov website:
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed

Here's a link to the site: http://www.irs.gov/Businesses/Small...ependent-Contractor-Self-Employed-or-Employee

The site mentions that there are not one, but three "common law rules" to help determine if the worker is a genuine independent contractor: behavioral, financial, and type of relationship. I don't often use subcontractors, but I don't believe that giving them instruction as to when to be at a job or where to be (behavioral) is of itself indicative of whether they are genuine subcontractors or mere employees. In fact, I am comfortable in having our people work with the subcontractor and tell them things like "slow down, you're burying us with brush!" or "lets go smaller next time!" or any of a number of directions the kind of which are entirely appropriate to our operations. You can't run a tree removal operation without some of that kind of reciprocal interchange occurring. Even if they use our chainsaws, I don't see how this is indicative of whether they are true subcontractors. I haven't ever had to defend against a subcontractor becoming injured or damaging the property of the client with the liability issue of whether they are employees or subs brought up. If they have all the licensing and insurance, and they only occasionally work for you and get 1099's, I think that should be enough shouldn't it?

 

[treehumper]

A wise person once said, "Don't should on yourself." What should and shouldn't be have little to do with what is or isn't. Just know how the relationship will be tested. If it appears that the sub doesn't have a say in when they are available to do a given job then, they are an employee. While an interchange of ideas through the course of the day is normal, no different than it would be with a crane operator, are you telling them how to do the work and with what tools? Imagine it's a plumber, do you dictate how they'll work or what time they'll start and finish? You may negotiate an appt time but you don't dictate it. When I subbed my client was always careful to ask if I was available not to tell me when to be available. As for tools, are they reliant on you for those tools necessary for them to operate in their business? While in a one off scenario that may be ok, it wouldn't fly if it were consistently like that.

You can do whatever you want until you are investigated for whatever reason. While we're small potatoes and not likely targets of a specific investigation into this practice, a routine audit could expose your non-compliance and then the sh$t hits the fan. Read the article about Fed/Ex and just imagine what that'll cost them. That's 2300 drivers over 7 yrs that were misclassified as contractors. If you do a search on independent contractor case law you'll find more examples.

 

[ward]

You are right, Hump, its all speculation until you get put to the test. My point is that it is absurd to stipulate that there can be no direction to the subcontractor in this line of work. Even a house contractor would tell the subcontractor "hey, you've got to do the electrical on these days, because the sheetrock is going to be done on these days." Does that make the electrical sub an employee? Seems absurd. Likewise, having a contract climber that can't be told when or where to work is doubly absurd. If they are a true subcontractor, there would be many ways to establish this. If a regulator tried to establish that a contract climber was not a subcontractor simply because they received instruction as to where to be and when to be at a job, I would balk at that. I would challenge that to the end.

 

[treehumper]

Let's take that to the next step. The electrician has the option to say, can't do it that day. Now the contractor has the option of either delaying the sheetrock or finding another electrician. Besides, a contractor who schedules the sheetrock before the electrician is just asking for trouble!
It's not that absurd. They are a separate business you've contracted to perform a service. Look at a scenario:

You, "My client wants the tree work done on Friday the 13th."
Sub, "I might be able to but I'll have to check my schedule. I'm kinda busy that day but could do it Saturday."
You, " Nope, I scheduled you for Friday. You have to do it then."
Sub, "Guess you're on your own."

Once you decide when and where that person works you're defining the relationship. If this becomes the norm, you scheduling the work and the sub showing up at that time and place, you're walking a very fine line. But there are the other considerations as well. They may highly value your business and prioritize your work. If there are other clients that get scheduled around your work then that would be acceptable. The other aspect is whether what they do is key to your business. Are they doing work that without them you wouldn't be able to run your business?

Look at the total situation and just be sure you're on the right side of the law and you've not crossed the line.

I'm now an employee of the company that use to have me sub-c0ntract. Initially, I fit all the criteria but as time progressed the relationship became more like an employer/employee. At that point it was a matter of both of us agreeing to redefine the agreement we had.

It's all just proper business practice.

 

[Leroy]

You guys are crazy getting way to deep on this. As you said TH it's all speculation so what's the point of this back and forth? Maybe y'all enjoy it but it makes my head spin. Everyone knows Sam dont give a damn if you're giving him money.

 

[ward]

Let's take that to the next step. The electrician has the option to say, can't do it that day. Now the contractor has the option of either delaying the sheetrock or finding another electrician. Besides, a contractor who schedules the sheetrock before the electrician is just asking for trouble!
It's not that absurd. They are a separate business you've contracted to perform a service. Look at a scenario:

You, "My client wants the tree work done on Friday the 13th."
Sub, "I might be able to but I'll have to check my schedule. I'm kinda busy that day but could do it Saturday."
You, " Nope, I scheduled you for Friday. You have to do it then."
Sub, "Guess you're on your own."

Once you decide when and where that person works you're defining the relationship. If this becomes the norm, you scheduling the work and the sub showing up at that time and place, you're walking a very fine line. But there are the other considerations as well. They may highly value your business and prioritize your work. If there are other clients that get scheduled around your work then that would be acceptable. The other aspect is whether what they do is key to your business. Are they doing work that without them you wouldn't be able to run your business?

Look at the total situation and just be sure you're on the right side of the law and you've not crossed the line.

I'm now an employee of the company that use to have me sub-c0ntract. Initially, I fit all the criteria but as time progressed the relationship became more like an employer/employee. At that point it was a matter of both of us agreeing to redefine the agreement we had.

It's all just proper business practice.

That's right. The contractor would have the option of finding another subcontractor for the work if the original electrician couldn't make it. That shows the kind of independence that a subcontractor is supposed to have. And, that is the kind of independence that true subcontractor contract climbers have. In your dialogue (nice touch, btw), the sub demonstrates the right of refusal of a true independent contractor.

Sounds like in your case, the working relationship did change to an employer/employee one over time. You were wise to see it for what it really was and own up to that.
However, perhaps it was not right to say that it was the direction on this or that day, but rather, the constancy over time (more than a week or two), that would demonstrate non-independence.

Of itself, however, merely taking directions from the contractor as to where to be and when to be there on the few occasions for the use of the sub would not seem to constitute an employee/employer relation. Other tests of independence should also obtain. In other words, Levi, don't worry about being your own independent subcontractor because you are worried that if you take direction from your contractor, you'll be proving your own non-independent status. So long as you are truly independent (you have a business license, you have insurance, you have multiple clients, you have this chatboard to cite as a place that demonstrates the existence of Contract Climbers as Independent Subcontractors, etc. etc.), I think you can proceed with confidence.

 

[BuckmasterTreeService]

What responses did you get from your letters? What were the contractors concerns?

 

[rockettree]

For the most part the response was very positive. I'm very encouraged. One concern I heard again and again was that my skills were more important than my qualifications and that they need to be extremely high. I could've have done a better job of communicating my skill level in my letter.

I did get a couple of less positive responses pertaining to my statement about gaining more free time and control of my schedule. If there's one thing I wish I would've changed.......oh well. Nobody expressed concern over difficulty scheduling or limited availability, rather they adamantly stated their contrary belief that I would instead enjoy less free time and control over my schedule.

I think these folks, and others, view contracting as a stepping stone to owning a tree care company. I am not interested in taking this path, instead I intend to contract for as long as I'm able and willing. My long term goal, as the body wears out, is to get into consulting or offering a niche service of some kind. There are a huge, and growing number of tree care companies in my area. The discovery of EAB in my town and development continuing all up and down the front range is bound to generate even more potential clients for this type of business (contract climber).

I continue to be confident that after an initial period of making contacts and creating good relationships managing this enterprise will be fairly easy.