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Old 07-31-2010, 11:40 PM
techlabco techlabco is offline
 
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Question Paying for Road Time??

I am located in the Valley in Los Angeles. Fortunately, in these hard times, we are starting to do well. I have 5 guys working for my company. Here is my question to you guys in relation to pay.
My company is mainly a Mobile Computer Networking and Repair Company. My guys have to drive to wherever the client location is. Now, I have read about different methods of paying for travel-time, etc. and I pay them for the mileage they drive (.38 per) and start their hourly pay when they arrive and leave the clients home or business.
I haven't had any issues with it until yesterday. Hired a new guy, took him on some jobs with me but we were on the road most of the day due to the HORRID traffic of the 405. Now, I know part of this is my fault but I should have been specific with him as to how he was gonna get paid. I always am but I hired him quickly and got him on with me so we could take on a couple big company jobs.
He wanted to get paid hourly for being in traffic. I was gonna pay him for all the mileage but I didn't wanna make him feel I was shorting him. So, I paid him for 8 hours with 4.5 being in traffic.
Is this something that you would do? I mean, I don't charge clients for time I am in traffic but I know I have to take care of my guys but that is why I give them so much a mile. But a full hourly rate while in traffic? I don't think my clients could afford us if we adjusted to reflect!
Thoughts?
I am trying to improve as a small business owner and I am not a cheapskate...just want to do the right thing here. I have called other businesses and they do the same.
Or did I get a guy who was being unreasonable?
Haven't had any issues till now!
Thanks in advance for your thoughts and views.
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Old 08-01-2010, 12:15 AM
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I don't see anything wrong with the way your doing it.

If the new guy does not like it all I can say is the economy is not that good right now and there are a lot of starving techs. He would not be hard to replace.
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Old 08-01-2010, 01:26 AM
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Quote:
Originally Posted by vdub12 View Post
I don't see anything wrong with the way your doing it.

If the new guy does not like it all I can say is the economy is not that good right now and there are a lot of starving techs. He would not be hard to replace.
Great way to look at it: Hey, I can treat my employees like crap. If they don't like it, tough, there are plenty of other techs who will take the abuse.

@OP
Without more specifics it's difficult to say. If it takes them 4.5 hours to drive a 25 mile round trip, then they effectively getting paid $2 an hour. But if it was a 200 mile round trip, then it's obviously different.

Paying mileage should account for the time spent traveling for at least a reasonably discounted rate. In situations where you ending up paying a small effective rate because of traffic, I would say take a look at the effective pay rate and pay them enough to make it a reasonable rate.

In places where traffic is a common, such as LA, your rates should account for the time that you spend in traffic. That's not something that the business, nor the employees should have to eat; it's something that the client should to expect to have to pay for when they request on-site service. I'm certainly not suggesting that you pay your employees a premium for sitting in traffic, nor am I saying to include a traffic charge on the client invoice, but your customer should be footing the bill for the premium for not having to sit in traffic themselves.

Last edited by ATTech; 08-01-2010 at 01:34 AM.
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Old 08-01-2010, 01:43 AM
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Originally Posted by ATTech View Post
Great way to look at it: Hey, I can treat my employees like crap. If they don't like it, tough, there are plenty of other techs who will take the abuse.

@OP
Without more specifics it's difficult to say. If it takes them 4.5 hours to drive a 25 mile round trip, then they effectively getting paid $2 an hour. But if it was a 200 mile round trip, then it's obviously different.

Paying mileage should account for the time spent traveling for at least a reasonably discounted rate. In situations where you ending up paying a small effective rate because of traffic, I would say take a look at the effective pay rate and pay them enough to make it a reasonable rate.

In places where traffic is a common, such as LA, your rates should account for the time that you spend in traffic. That's not something that the business, nor the employees should have to eat; it's something that the client should to expect to have to pay for when they request on-site service. I'm certainly not suggesting that you pay your employees a premium for sitting in traffic, nor am I saying to include a traffic charge on the client invoice, but your customer should be footing the bill for the premium for not having to sit in traffic themselves.
If it takes 4 hours round trip to get to a job you can't expect the client to pay 5 hours for a 1 hour job.

I am not saying treat the techs like crap but how is the OP suppose to make a living if he pays the techs to sit in traffic. The only way to deal with this and still make a profit is to pay the techs minimum wage and we all know thats not going to happen.

Maybe an alternative would be minimum wage while waiting in traffic. Or if you can average your work then put the employees on salary.

My point is if the other employees don't have a problem with it but this new guy does then maybe he does not fit right in the business and replacing him is not going to be a hard feat.
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Old 08-01-2010, 02:38 AM
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Originally Posted by vdub12 View Post
If it takes 4 hours round trip to get to a job you can't expect the client to pay 5 hours for a 1 hour job.
As I said, there is no reason to bill it on the invoice like that, but the rates that he charges should account for traffic time.

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Originally Posted by vdub12 View Post
I am not saying treat the techs like crap but how is the OP suppose to make a living if he pays the techs to sit in traffic.
How are the techs supposed to make a living getting paid $2 an hour to site in traffic for half the day?

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Originally Posted by vdub12 View Post
Maybe an alternative would be minimum wage while waiting in traffic.
Sounds like a fair compromise. As I said, I don't think that he should be paying them their regular rate, but minimum wage sounds like a decent way to do it.

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My point is if the other employees don't have a problem with it but this new guy does then maybe he does not fit right in the business and replacing him is not going to be a hard feat.
I took it to mean that this is the only time that the traffic has been so bad where this has become an issue. Without the details of the miles traveled and the rate payed, it's impossible to give a good response to this situation. It's certainly possible that the traffic meant that he got paid a few bucks less an hour and the employee was unreasonable, and I would agree with 86ing the tech, but I've been stuck in LA traffic and know that $.38 a mile isn't much, even for up here, so based on that, I would be inclined to side with the employee.
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Old 08-01-2010, 02:56 AM
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Are these guys hourly employees or independent contractors? If hourly workers I believe there's labor laws that come into play here is there not?
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Old 08-01-2010, 02:55 PM
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The OP hasn't specified whether he provides company vehicles for his techs use (although the example with the new guy indicates he was a ride-along), but usually "mileage" payments are to compensate for the actual and immediate expense of gas, plus insurance and maintenance/vehicle wear and tear. It's not typically a compensation for time spent - and certainly not at 38 cents.

Everyone needs to earn a certain average per hour to pay the bills and have a basic standard of living. A mileage rate, rather than an hourly rate does little to achieve that standard.

A tech driving a short distance in slow traffic gets cheated compared to the tech driving a long distance at high speed. Which one will get paid more for the exact same amount of time away from the office? That doesn't seem right.

Certainly an unforeseeable traffic jam isn't exactly the owner's fault, but if it's truly a rare occurrence (in LA?!), it's a risk appropriately assumed by the business, rather than the tech. After all, the tech doesn't set the rate, the schedule, or the service area. A responsible employer does assume a certain exposure and risk on behalf of his or her employees. If it is too burdensome (too many traffic jams?) perhaps the average customer charge needs to be increased.
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Old 08-01-2010, 10:56 PM
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This is an interesting situation and one I don't have the answer for but I find intriguing.

I don't know what hourly rate you pay your guys while they are actually working but it sounds to me like, they are spending at least 50% of the day in traffic. So whatever rate you pay them while working, can actually be divided in 2, once they figure their actual pay for actual hours "at work".

Again, I don't know what you are paying them hourly but it seems like it's got to be ALOT since they are only really getting paid for 50% of their work day.

I have no idea what the answer is to this problem since I work in a small town of 25-30K and there is no traffic whatsoever. I understand that if you paid them their full hourly wage the whole day, you'd go broke...but maybe this business model won't work in a big city unless you have people willing to work for beans? I just don't know. How long have your other guys been working for you? Have they ever had any complaints about only getting paid for part of their work day?
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Old 08-02-2010, 12:10 AM
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Quote:
Originally Posted by Appleby View Post
This is an interesting situation and one I don't have the answer for but I find intriguing.

I don't know what hourly rate you pay your guys while they are actually working but it sounds to me like, they are spending at least 50% of the day in traffic. So whatever rate you pay them while working, can actually be divided in 2, once they figure their actual pay for actual hours "at work".

Again, I don't know what you are paying them hourly but it seems like it's got to be ALOT since they are only really getting paid for 50% of their work day.

I have no idea what the answer is to this problem since I work in a small town of 25-30K and there is no traffic whatsoever. I understand that if you paid them their full hourly wage the whole day, you'd go broke...but maybe this business model won't work in a big city unless you have people willing to work for beans? I just don't know. How long have your other guys been working for you? Have they ever had any complaints about only getting paid for part of their work day?
I'm in a rural area myself and I am also just starting out so I imagine things will get better as time goes one but I spend at least 50% of my time in my truck and there is hardly no traffic here at all but I also server two separate counties so distance between jobs can sometimes be a problem.
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Old 08-02-2010, 02:21 AM
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We can all sit here and play jailhouse lawyer, but the op here really needs to check with his local/state labor board. Pretty sure there's hardfast laws dealing with issues such as this.

Now that I think about it, I used to work for a company in a similar capacity and we weren't even allowed to do dashboard lunches on the way to a job because we were still considered on the clock when in transit.

Last edited by Peaceful; 08-02-2010 at 02:31 AM.
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