Hiring first employee/driver. Payment options/structure

[SunsetTowing]

I'm unsure if this even belongs but seems to fit here better than anywhere else.

 

I'm new here & new to the business.  My significant other & I opened our company about 7 months ago & we are ready to hire on our first employee/driver.   My s/o has many years experience working as a tow operator but has always been paid 1099 on commission only.  We are hiring a part or full time employee and will be paying as such on a w4.  So I know for the nature of the business, we are exempt from the state minimum wage but what about the federal minimum wage.  My hopes are that an employee paid a % will far exceed that requirement (if it does apply) but what to you do in the event that some weeks are lacking?  Are we required to somehow compensate w/ a base pay/hr to meet the $7.25/hr federal minimum wage?

 

What type of pay structure do you use for your drivers, when they are in fact classified as employees (driving my trucks/our rules/our schedules/etc).  I need ideas or something workable, and asap!

 

Thanks!!

 

 

[goodmichael]

Paying your employees with a 1099 is a big NO-NO. A big one. you will get yourself into hot water fast with the IRS. They are an employee, not a contractor. I have always felt that 25-27% is a fair commission rate. You can also use safety/ performance bonuses to add incentives. When the Streamlight Stinger flashlights first came out, I received one of them as a safety bonus. I have it to this day. It looks like it was outside the space shuttle and went to the moon and back, but it is still fully functional. I strongly recommend that you read the book by Dave Ramsey entitled Entrée Leadership. One of my favorite lessons of the book was how their organization is so selective in hiring. They actually take the prospective employee out to dinner, on their dime to a meal in order to assess how the employee conducts themselves with their significant other, how they treat the waitstaff, and their general demeanor.

 

Be selective in who you hire. Having an attitude of a seat for every ass will get you in hot water as well.