What are the thoughts here on having employees vs indendant contractors? I mean in the areas of an employee has taxes with held and a ic gets 1099 at year end. Any of you guys have experience here?

LW

Below is a very interesting article that i found , the site is http://cbs3.com/topstories/limo.driver.unemployment.2.298769.html



Private Drivers Not Entitled To Unemployment
HARRISBURG, Pa. (AP) ― Limousine companies that rely on independent drivers to chauffeur their clients are not the drivers' employers and do not have to pay unemployment taxes for them, Pennsylvania's highest court has ruled.

Upholding Commonwealth Court rulings on legal challenges filed by five limousine companies, the state Supreme Court said the drivers are independent contractors, not employees of the limousine companies.

"It's a good thing for us, and for anybody who's in a subcontractor-type business," said Bill Moser, president of A Touch of Class Limousine Services Inc. in Camp Hill, which was one of the plaintiffs.

The state Labor Department, which had assessed the five companies more than $75,000 in Unemployment
Compensation taxes, penalties and interest, contended that the drivers do not own the vehicles and therefore lack the "proprietary interest" in their businesses necessary to qualify as independent contractors.

In a 6-0 decision dated Tuesday, the justices disagreed. They said the department had invented the criteria for establishing proprietary interests and applied those standards to free-agent drivers employed by the limo companies, even though the expense of obtaining a limousine license from the state Public Utility Commission makes it unlikely that the drivers could supply the vehicles.

"It is clear to us that the majority of individuals who provide driving services to limousine companies would lack the financial resources to own all of the assets of their businesses or bear all of the risks on their own," Justice Sandra Schultz Newman wrote in the majority opinion.

Labor Department spokeswoman Shannon Powers said lawyers there were reviewing the decision, but had no immediate comment.

"Obviously we're not happy" with the ruling, she said.

The court said the drivers are entitled to independent contractor status because they are free to work for competing limousine companies with no adverse impact; their ability to work does not depend on the existence of any one company; and they possess the driver's licenses and necessary experience.

"It's a call-on-demand-type business," said Moser, whose company keeps a list of drivers and contacts them as jobs come in. "Whoever responds first gets the job."

Jim Salinger, co-owner of Harrisburg-based Unique Limousine, said he employs and pays unemployment compensation taxes on 15 people who staff and clean the company's offices in Dauphin, York and Lancaster. The company's arguments that the 80 chauffeurs it hires on a job-by-job basis are in a different category fell on deaf ears in the Labor Department, he said.

"They had a mindset that everybody's employees and that's the end of it," he said.

There are hundreds of limousine companies in the state, although an exact number is difficult to nail down.

The PUC, which regulates the industry in most of the state, lists more than 550 companies, while the Philadelphia Parking Authority lists about 350 in the state's largest city. PUC spokeswoman Cyndi Page said an unknown number of companies are likely on both lists.
(© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Here in the Cincinnati area most limo companies charge 20% for the drivers tip so they don't get stiffed by the customer and pay a 6-10 dollar per hour but the drivers can get killed on airport and other small jobs, I talked to drivers who's companies worked them 8-10 hours and they get 5 or 6 billable hours Pay


We charge 20% and pay the driver 25.00 per hour + 12 dollars for down hours between jobs provided it is not more than a couple of hrs)
and we also cover a drivers time any time he goes over a reasonable drive time (1/2 each way) to and from the job.
the drivers seem to be happy with this and its more consistent

I agree with you guys. The problem has always been if you pays your guys/gals strictly hourly, there is a tendency to slack off (extra long breaks, naps behind the Wal-Mart, etc.). After thinking this over a little, maybe the GPS would be a way to overcome this. The reason I like percentage (especially as a chauffeur) is that I take pride in paying attention to the details: When is traffic bad at certain times, best way to get to drop, taking care of clients so they ask for me when they call in. Now, that being said, these things would make me a more valuable employee and therefore "move up the ranks" in a hourly paid atmosphere, but the rewards are greater (in my opinion) in a percentage atmosphere. I respect the companies that pay everything by the hour, have employees that respect what they have and treat their employers as such. I will look into this more with our company and strongly consider changing our business plan. Owning a business is not an easy task by any means-I do covet your advice from many years of experience. I still think our tax code is garbage though.

quote:

Originally posted by HeavenOnWheels:

Ok, I have a question for those of you who pay a percentage PLUS hourly. During prom season and special events, where your prices are easily one and a half or even double what you normally charge, are you still paying them 10, 15, 20 percent plus hourly?

That would mean a driver would easily be making $40, $50 or even $60 an hour in some cases PLUS an hourly wage?

And if not, do your drivers feel like they are getting ripped off and the "big bad limo operator" is sticking it to them?

HOW,

As very few are willing to come on (in the past also) & lay out how they pay their drivers, let me fill you in on how it is done in certain markets & maybe the same market 7 is located in.

Drivers are paid either a flat pay plus grat (normally for drops) or;
Paid an hourly wage plus grat

Drop pay, which most of the times are AP's, are based on an unscientific formula of how long it should take vice a reality check of traffic, weather (things move different in snow country), & all of the other little things the road throws upon us where the client is not charged extra. So, needless to say, that flat pay figure which sounds like one would be making $15 an hour with the grat added in is actually a lot less.

So, how does the operator make up to his/her troops for hanging in & keeping all of those yuppie corporate clients happy? Hourlys, weddings, proms etc.. So where the driver may make a killing on a 10 hour prom where he/she is pulling down $35-40 an hour. Reality is that there were a shit load of $8 an hour jobs performed to earn that gravy job.

quote:

Originally posted by sevenswild:
$100/hour for 120". (we are not the highest, but we are above average).

15% payed to chauffeur=$15/hour
20% tip=$20/hour
$35/hour-you guys really consider that treating our chauffeurs like dogs? I realize we are not big city like LA, New York, or Chicago, but that's a pretty good wage in these parts.

Ok, I have a question for those of you who pay a percentage PLUS hourly. During prom season and special events, where your prices are easily one and a half or even double what you normally charge, are you still paying them 10, 15, 20 percent plus hourly?

That would mean a driver would easily be making $40, $50 or even $60 an hour in some cases PLUS an hourly wage?

And if not, do your drivers feel like they are getting ripped off and the "big bad limo operator" is sticking it to them?

$100/hour for 120". (we are not the highest, but we are above average).

15% payed to chauffeur=$15/hour
20% tip=$20/hour
$35/hour-you guys really consider that treating our chauffeurs like dogs? I realize we are not big city like LA, New York, or Chicago, but that's a pretty good wage in these parts.

Personally I have nothing aganst being an IC if it is done right. Problem is the only reason many operators call you an IC is to save themselves of having to pay your payroll taxes and Workers comp. and still only want to pay you the same amount an honest company would pay a full employee. The Guy I worked for that I got the ruling on only paid his "IC's" minimum wage per billed hour. In reality he was paying an IC less than a regular employees makes.

Now If He was paying me an amout substantually more (at least twice as much as a regular employee) so I could cover my own payroll taxes and workers comp., well that might be a different story. Better yet, if he would just rent me the Limo for the day and I keep 100% of what the client pays plus tip and I am free to book my own work, now you are talking.

I have contacted the company referred by Jeffrey. Unfortunatley, despite booking a reservation and even presenting my AMEX card, I could not extract any information indicating they do anything different than everyone else. I asked if a chauffeur would contact me. I was told no. I was also told that any gratuity I decided to give should be given directly to the chauffeur at the conclusion of service and they recommeded 15% and that would be "about $300".

I told her it was for a family reunion in July and I was sure everyone would pitch in. I asked if they had any drivers that were really fun and would enjoy hanging out at our crazy family reunion and if I would be able to talk to some of their drivers before the event in July. She said she would pick a good one for me but did not offer to have any of them call me. I can't really write a story about this issue because I can't find anything substantial.

I think the employee vs. IC debate will forever rage on here.

[QUOTE]Originally posted by Dean Schuler:
The people that actually produce the income are your best asset. Makes you wonder why some owners treat them like dogs...[QUOTE]

Especially those restrictive market entry loving bums not wanting to pay OT to their workforce!!!!

The people that actually produce the income are your best asset. Makes you wonder why some owners treat them like dogs...

quote:

Originally posted by Limo Scene:
If your wages are made up most from tips - quit and go work for someone who values you more. I pay enough hourly wage that a person can make a decent living. The tips are merely a bonus - not the main source of income. That is a problem with many smaller Mom & Pops is they don't place enough value on the people that actually produce the income by serving the client.

Chauffeurs should always get paid for cleaing the car.

If your wages are made up most from tips - quit and go work for someone who values you more. I pay enough hourly wage that a person can make a decent living. The tips are merely a bonus - not the main source of income. That is a problem with many smaller Mom & Pops is they don't place enough value on the people that actually produce the income by serving the client.

Chauffeurs should always get paid for cleaing the car.

*sigh* I've rewritten this 4 times now. I'm trying my hardest not to go on rant. I agree-DriveCam and GPS are vital to our industry. I would have to say that hourly or percentage depends on your operation. I am confused on why Jeffrey doesn't get paid for work? Is it cleaning out car or waiting at airport/port for trip?
Now I promised I wouldn't go on and on, but if you think they're a contractor and everyone else does, then why doesn't the government? I realize this has been a long fought battle-but seriously, if your wages are mostly made up from tips wouldn't that be as close to IC as you can get? What happened to a free country? Vote for the flat tax.

quote:

The GPS option is interesting. But seems like a lot of money to pay someone to "watch the bread crumbs" (go back and look at each individual run?)when you could just pay them percentage. This run pays x and you get 20% of x. Sure once in a while run doesn't go as planned and takes longer, but then there are times when run is quicker than expected. And if run pays by hour, then they're paid by hour-why is this way so bad?

Well, first I will say that someone has to "process" the trip ticket after the ride anyway. This includes billing the client or in some way settling the money issue. The payroll for the chauffuer must be calculated and entered into payroll, the vehicle miles must be recorded and viewed for maintenance issues and finally the job should be "costed" to make sure we made money. I should say when I stumbled into the limousine business I was working for a very large accounting firm and I am a bean counter at heart that loves stats. Kind of like some of my friends here like Wade and Tony.

So, it is really just a part of processing the job. If you pay by the job, a percentage, then you are actually contracting. All of my people are employees. We maintain direction and control over each employee through a policy and procedures manual. As such, state law requires that we pay an hourly wage. Due to the nature of our business, it isn't always as simple as clocking in and clocking out - which my employees do by radio. If a guy has a single run, it is fairly easy. He comes to work, he clocks in, does his pre-trip inspection, reviews his orders, stocks his car if needed and away he goes. He does his run, goes to get fuel, comes in and cleans the car and clocks out.

Now, for the guy that has 3 runs in the day that are split up it becomes different. I don't mind paying the guy up until the time he gets to his house. Then he has a three hour nap and goes back to work. Now, he logs back on and does this trip. He then goes to the airport and waits there directly after his previous run. But on the way there, he stops to have lunch at Denney's for 45 minutes. I don't really care to pay for that so stops like that can be verified as off-duty.

I do believe in paying everyone for every moment they work. But time is something that is easily stolen and in fact is the number one loss for corporations in America. 6.8 Billion dollars is spent each day paying employees to look at personal e-mails. Good accounting controls, like a good accountant, cost money. But in the end, what you save far offset the potential loss.

I have no problem paying by the hour, as long as it is for the hours worked. Do you suppose chauffeurs ever run personal errands, using their employers gas between runs? Do you suppose they ever stop by somewhere before they bring the car back? And do you suppose they ever give someone a ride and pocket the money? All good reasons to have an monitor GPS. The same with spending money to have someone watch incidents recorded by DriveCam.

The GPS option is interesting. But seems like a lot of money to pay someone to "watch the bread crumbs" (go back and look at each individual run?)when you could just pay them percentage. This run pays x and you get 20% of x. Sure once in a while run doesn't go as planned and takes longer, but then there are times when run is quicker than expected. And if run pays by hour, then they're paid by hour-why is this way so bad?
It seems to me like more rules are added, the more money we have to spend, and creates more complaining. I think everyone should get x per hour no matter what your job, and everyone should get one loaf of bread per week. I understand regulations for safety, but when can we draw the line?

I would love to send you an e-mail but your profile does not include an e-mail address. I am personally not aware of any company that does this type of business.

The one thing we can agree on is that you should in fact be paid for all hours you actually work. There are 2 ways that a company can do this:

#1 - When you arrive at work and are ready to begin work, you punch in on a clock. (In my case, the chauffuer calls in by radio - "Sedan 6, Log-On, staring miles are 36,218) When the work day is done the chauffuer clocks out.

#2 - GPS Logging. By installing GPS in the car and watching the "bread crumbs" it is easy to reconstruct a trip and how much time was actually spent on it. The GPS also tracks the time the ignition was turned on. We all know chauffeurs like to idle their cars while getting them ready for the warmth in the winter and the cold in the summer.

I believe if you absolutely should be paid for the time driving to the pickup location, of course all time during the run and a sufficient time to obtain fuel and bring the car back to the garage.

I don't think it to be a good Idea to post there name because I have not yet confirmed it to be true. But if you want a lead to check send me an email and i wll send you there web site

I was just looking for more info on this idea myself, some input from someone who is doing this type of thing.

after all I'm out there on the streets with the other drivers or should we say employees, and seem to run into a lot of drivers that work a lot of unpaid hours. I think they should make all these self-righteous employers pay there drivers and honest hourly rate after all when should a drivers time start and end, is it billable hours or hours worked

There is a company in Atlanta that will rent passenger busses. I don't know what the max passenger capacity is though, but they had what looked to be 22 paxs on the lot.

I cannot remember the name of it though.

Michael: This Guy was out of the Saginaw area. It was back in the 70's that he was in business. I know his name and his company name but I don't think I should say but I will tell you this, He contracted to run the Port Huron Michigan bus service for one year in 1977 and 1978. I do not believe he is stiil in business. It would not suprise me that there are probably a few Limo companies in Michigan who would do something like this, they are a creative lot up there.