Episode 101 – Cleaning Employees
In today’s episode Mike coaches Debbie Moon Davis from Rag Mop Cleaning http://www.ragmopcleaningdsm.com on Cleaning Employees.
Debbie is returning to the cleaning world from corporate America with a bang and needs to know if should she keep her cleaning employees as independent contractors of hire them as employees.
First and foremost any time you run a business you always have to be legal.
Dotting your i’s and crossing your t’s will always serve you well.
As a business owner you are responsible for everything so you want to make sure that when accidents happen or the government comes knocking, you are in the clear.
Make sure you have 1099 employees if you are paying them as 1099 employees per the current state and federal laws.
If and when the government decides to audit you they will look at how you pay your employees and if you aren’t paying them correctly you could be in for a shock when they hit you with thousands of dollars in back taxes.
BONUS TIP: Get with an accountant and make sure you are following all the rules. If you can find an accountant that specializes in cleaning companies that is almost always the way to go.
If you are paying your employees as 1099, they should be providing their own insurance and workman’s comp….but let’s be honest here and really think about how many of them actually do that.
If a 1099 Cleaning Employee gets hurt on a job site and sues you and your company, the homeowner or building owner to cover their medical bills, you could be stuck holding the bag because you didn’t protect yourself and set them up correctly.
What about using a PEO (Professional Employer Organization)?
A PEO is a company that can “hire” those people for you and handle all of your payroll/workmans comp etc. but keep in mind their ultimate goal is to sell you a product or their services- and taking care of you is secondary.
You are definitely going to want to get a payroll attorney on your rolodex and make sure you can call on them for clarification and proper advice.
Now assuming everything is done correctly and legal per your state’s laws let’s move on to answering Debbie’s original question on whether or not she should keep her workers as 1099 or hire them as her full time Cleaning Employees.
If you look at the larger companies out there, within or outside the cleaning company world, there are a couple of them do the 1099 but they mostly have employees and for good reason.
The control you have vastly outweighs the cost associated with hiring cleaning employees.
The main reason I would hire employees is the value that my core values brought.
With employees you can draw them in with your core values, build culture, attract a better caliber of cleaning employee.
It’s almost impossible to create that with 1099 employees.
1099 employees can have a mentality of not owing you anything, they’re just hired guns. They don’t have to give a 2 week notice, they don’t care about your vision or goals, in the end they’re in it for a paycheck and will leave when something better comes up or the job gets too hard.
With employees you can get them into your culture, they care about your business, your values and are working on the same plan towards your goals
It’s hard to build a million dollar company with 1099, you need more control and influence than you can get with 1099
You may be asking yourself “what if I can’t afford employees or do things 100% legal right now?”
If that’s the case with your business, there is a fundamental problem with your company that you need to go back and look at and fix before trying to grow.
It could be a problem with your margins, you aren’t charging enough, you’re overpaying for supplies, you’re mismanaging time etc…All of those things need to be addressed before bringing on more people or accounts.
If you are skirting the law to make ends meet, eventually something is going to happen, an injury is going to occur and you are going to be paying for it – so you might as well just fix the revenue problem in your business and do it legally and have control over the situation rather than trying to fix it once it’s a huge mess.
Keep in mind, employees aren’t the pot of gold at the end of the rainbow, they come with their own set of challenges, expenses, management and pricetag but they are the lesser evil of the two.
Finally the key concept when it comes to cleaning employees is, don’t just get employees to be legal, maximise it and take the opportunity to get “super employees” by really building a company culture, living your core values and attracting the right people to your company.
Debbie closes out this awesome episode with her Lightning Round genius
Get out of your own way
Always do background checks on your employees
If you’re going to do something, be passionate about it and be the best at it that you can