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Old 05-17-2009, 07:45 AM
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Default Costs to your company

Quote:
Originally Posted by picframer View Post
My son basically looks after hiring employees for us, mainly University students until high school is out then I will have three more coming on board.

We were having a conversation last evening and I don't agree with something and was wondering what you guys think.

The question or topic is:

We have to pick up a few employees and take them back home, this sometimes means an employee will have to leave a job site to drive another employee home because they have a summer class or some coach various sports.

Son thinks we should pay the employees from the time we pick them up to the time we take them back home. I was looking at these costs yesterday and it's pretty high, fuel and down time and some of our trucks are only getting 12 mpg, a lot of our work could be 45 min to an hour away from where they live.

I pay my employees between $12.00 to $20.00 an hour, last week alone the transportation costs and what I call down time costs or pay given while work is not being done is pushing $900.00m that is $3,600 a month. I also supply shirts, hats, jackets, gloves, employee is told what shade of pants to buy and where to buy them. I also supply all rain gear and three employees have company vehicles, I don't mind them stopping on the way to or from a job site with a company vehicle for personal use but vehicles are not to be used without permission for example to go out for an evening. They get a bonus from time to time, keeps moral high. I keep an eye on all this using GPS, not to watchdog the employees but I want to know where all my equipment and vehicles are.

My thought is an employee should be paid from the time they arrive at the job site until the end of the work day at a site, I would pay travel time between job sites.

So is my thinking reasonable and how to I change this without causing problems? This is an oversight on my part, I was simply doing a profitability review and picked up on this and was a bit shocked at the cost.

Andy
Andy,

I think you are underestimating your costs. I donít know how it is in Canada, but here we have to match their retirement (Social Security) 7.65%, SSI (Supplemental Security Income) 3.65%, Workmanís Compensation $0.50, Disability Insurance, and Unemployment insurance.
Your employee who picks up and delivers that employee has double the time of the employee they are transporting. Furthermore, our new administration wants to require all employers to furnish health insurance for all employees. This alone could add up to another $200.00 + per employee per month.

If they worked for say ABC Vending, they would have to get to work on their own and be paid from the time they started their route until they returned from their route. There would be no down time for equipment and 2 employees, no extra fuel costs, and no need to cover the additional expense by increasing the costs to the consumer.

How do you change this policy without causing problems? I think it is a lose-lose situation. Here there is such an entitlement culture that if you do it once, they feel it is their right and your duty to continue the practice.

Honesty and a direct explanation to the "entitled" of your concerns is probably your best out.

Steve
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