CA Handyman (not Contractor) has started asking for $500 in Labor per job

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CA Handyman (not Contractor) has started asking for $500 in Labor per job

Account Closed
Homeowner · Signal Hill, CA · Member since 2015 · 521 posts · 70 votes

Am a NY licensed contractor who moved out here to LA county barely a year ago.. my CA contractor license is still pending. So in the mean time, I been keeping busy with working on my own properties and a few small landscape and PM accounts. 

My handyman's son (in his early 30s) who had so far been reasonable for helping me with projects on my own home for the past several months, recently shared that fact that his father isn't getting any new jobs and so I gave him  (son, not father) a bunch of projects he can help out with, mostly outdoors/landscaping and exterior.

I never pay per hour, as that would materialize an employee-employer relationship. He works on his own time and schedule, with little supervision except time and time again I happen to be there to make sure he doesn't fall or get hurt, as well as just to help the project get done faster and move onto the next.

Sadly though, it seems since business has been so slow with his father (he metioned his father hasn't paid him for the little jobs they do (for other clients, not me) together these days). Yesterday he stated that he does not believe my budget for little projects around the house is 'fair' (even though it approaches near $2,000/mo for labor alone!) and printed up a list of projects that I want to get started on, and listed a labor fee for each. I think the list added up to like $5,000 in labor for projects that would get done in less than a month working just a few hours each day of the week.

For example, he listed painting the house exterior (stucco), and put $500 in labor next to it. 

He and I have discussed on several occasions that fact that current CSLB wording  that limits handymen $500 per project is the maximum for both materials AND labor per project and that that would be the basis for fairness sake especially since I give him the project but still end up helping alot anyways.   We've also discussed the fact that these are all optional, cosmetic things that if don't fit in the budget, simply won't be done or will be done at a later date on my own when I get around to it.

(He's also known for some time why I longer give his father new projects: because his father -also handyman, not a contractor - kept quoting thousands of dollars per project despite knowing the CSLB rules that govern handymen and their work in the state.)

How would you deal with this if you were in my shoes? (My gut instinct is just to do all other work which is just cosmetic and non-structural anyway, and all exterior, as I am accustomed to: on my own from here on out till I get my CSLB license and can then get insured and pay helpers by the hour and so on).

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Jeremy Pace
Contractor · Pittsburgh, PA · Member since 2014 · 885 posts · 359 votes
11y

This guy has got to go.  You're the one who pays, so you're the one who decides how much to pay.

I've had similar issues in the past with the people who do work for me.  Because of things like this, I now tell them upfront what the job will pay.  

For example, if I need a tub surround replaced, they get paid $125 (I supply all materials, so it's strictly labor).  They get half when they start, and if they haven't finished the work in two days, I'll never ask them to do anything for me again.  Every single time you let a day laborer set their hourly rate, you can be damned sure it'll take them all day.  In this particular case, the guy was upset I wasn't going to pay him more ... I just told him it was a great opportunity for him to get paid $60 an hour.

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  • DL Martin
    Rental Property Investor · Cincinnati, OH · Member since 2013 · 292 posts · 280 votes
    11y
    Originally posted by @Account Closed:

     While prison space may be extremely limited, doesn't a day go by that my housemate who is a poster (posts bail after bonds are secured) isn't totally swamped by the plethora of clients waiting in line to bailed outta jail 24/7 just in Signal Hill & Long Beach cities alone.

    Your roommate is posting bail for felony offenses. I skimmed through all of the Business & Professions codes associated with contractors and licensing and did not see one single FELONY. All misdemeanors.  Even after multiple prior convictions, new offenses are prosecuted as misdemeanors. 

    Probably the best example of unlicensed contractors operating with impunity are "gypsies" who trick elderly residents into "paying up front" for roofing or driveway blacktopping jobs. As far back as 2000, The Los Angeles District Attorney WOULD NOT go forward with any of these cases unless the "loss" was in excess of $4,000.00.  I would bet that by now the threshold is $7,500 or greater. 

    DL 

    1Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @Account Closed:
    Originally posted by :

    Second point is, in CA, there is no such thing as handyman, it is either you are licensed or you are not. I will be blunt, what you are doing is illegal, what the son and the father is doing is illegal also, they are unlicensed contractors. Even if you pay $300 labor and 150 materials each time, but the work is continuous, it can still be considered as series contracts (one contract after another within a period apart, even if you do 1-3 day a week/month, as long as it has a pattern, it could be considered as such).

    Thanks Manolo for all the advice, esp regarding WC. =D

    I get what you're saying except you've avoided the fact that in the OP I pretty much explained I tell my 'unlicensed contractor' what nexyt small project needs to be done and he comes back to me with a quote and if I can afford it, it sounds reasonable, and if and only if it is below $500 in labor+materials, I say yea get it done.

    My question is, why does CSLB allow unlicensed contractors to charge up to $500 material/labor, if even charging $1 is like you say, 'illegal'? Are you saying I can only use 1 handyman/independent contractor ONLY once? That I should never use the same handyman/independent contractor more than once lest I establish a 'continuous' 'pattern'?!

    I also specified  this is is all cosmetic, exterior work.  Paint the stucco. Fill the cracks in my driveway. Your reply is what I'm doing is illegal. Seriously? Today I paid my neighbor's 19 year old son $20 to reseed my lawn. Is this also illegal? Are you going to tell me that painting a house is continuous? That reseeding a lawn is continuous? I mean seriously how often does one get their house painted, continuously? Get their lawn reseeded.. continuously? Sure sounds like that is what you are saying.

    Hey so my neighbor's son offered to weed the lawn for another $20.. will that establish a 'pattern' and will it make it illegal, or was it already illegal when I gave my neighbor's son $20 to reseed my lawn? 

     What's worse than a beauracratic government? A litigious people! =/

    Disclosure: I am not an attorney and this is not a legal/professional advice, the article below is for educational purposes only.

    The basic rule to these so called handyman being $500/contract is a basic understanding of "day labor", that means, that you need help on something, you hire them, but the job is not significant enough to constitute a contract. To what I understand from doing government contracts and basic law, and this could go in the grey area; if you hire somebody today, end the job tomorrow, give him another set of job next week and end 2 days after, then another set will go a month from today, that would basically tell these entities that you are evading the basic taxes, unlicensed contractor law, the whole nine yards. There is no solid rule as per the continuous/series contracts (sure, go ahead and re-hire him, no rules after all, just risk), and it does not compute like 500 contract #1, 400 contract #2, 450 contract #3, but they will consider you are just breaking the employer law and evading the unlicensed contractor law by going just under the radar, more likely no one is going to know, but you could never tell. Take for example like the IRS' rule on laundering, where government entities could launch an investigation if you make repetitive deposits to an account 8-9k once a month and you will do it for a year or more, now the rule is 10k or more gets reported to the money laundering section. Going back to topic, I believe in the saying: if it is not in black and white, they don't exist. So if you don't have a contract, it goes under he said she said, and that is the weakest form of evidence. Remember that CA always sides on the employee, and they want money.  I have a handful of my employees tried to make false injury claims, but they could never win, since my safety program has an embedded clause that they had not sustained injury during last weeks work, and when it is time for me to do a closeout on the project, they had to sign that the job was done and completed thereby no more work is left for them, this prevents them from collecting unemployment and making false injury claims.

    Anyway, I won't tell you what you must do to constitute right path, but I will give a scenario where it could go south, what you do with the thought is up to you. Say you hired this guy for 5 months now, and you probably paid him about $10,000 worth of labor, he gets injured, say he lost a thumb on a grinder, he comes to you asking to help on the expenses, you refuse, he goes to CSLB or DIR, now you got a lawsuit, not only that you will have to pay him AGAIN for more than 10,000 (they go by government rates) for his hours that he worked for you plus their injury's worth plus some 50% Work Comp Insurance plus somewhere like 13%employer liabilities share add all that plus some 50% penalties, but you have to give the entity a record on how many days and what kind of work they did. While the guy sits back laughing and waiting for his check. (Source: story from a subcontractor when he started.)

    Chances are, if no one complains, nobody is going to know. :)

    1Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @Kevin Dickson:

    I'm sure you were aware of temporary labor services, but you should seriously consider them to keep everything legal and lawsuit free:

    http://www.laborready.com/docs/default-source/default-document-library/labor-ready-fact-sheet-2014.pdf?sfvrsn=0

     I have a sub that uses this service, they are a joke, nobody knows anything except carry materials. You are better off hiring a day labor from home depot. lol.

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  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    11y

    @DL Martin Haha, I love what you posted about B&P, I never really read them, that is why California is rich in penalties. Tickets means $$$, and the more you don't pay, the bigger the penalty, and they have a pretty effective collection system. LOL. Speeding tickets are $22-25/mph while other states collect $10-12. Sharks on land.

    @Brian Mathews Amen to the screwed up state. There are a ton of regulations here, you just need to navigate and squeeze yourself within those thin lines. It is so screwed up that it opens a lot of loopholes.

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  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    How can someone expect to get a house painted for $500?  Am I missing something here?

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  • Account Closed
    OP
    Homeowner · Signal Hill, CA · Member since 2015 · 521 posts · 70 votes
    11y
    Originally posted by @Manolo D.:

    Chances are, if no one complains, nobody is going to know. :)

     Oh, I see. So much for the idea of hiring independent contractors and paying the flat fee they quote per project and having them do it on their *own* schedule and with *no supervision* other than being there to help them not get injured while on one's own property!

    So I take it, in California,  an independent contractor that does minor work doesn't really exist then, unless he's 'licensed' by CSLB then he can quote the sky is the limit. Which brings me back to the enigma as to why CSLB even bothers providing for small work under $500 in materials+labor per project o be done by 'unlicensed' - to me it implies they are contractors as long as they are putting a pricetag on the labor as opposed to be asking for a certage hourly wage.

    My way of recording and reporting wages paid to independent contractors/laborers has so far always been (for the past decade) to issue a 1099-MISC to anyone who I paid $600 or over in the past year. I've never paid anyone other than per-project, ever. If this method of paying for help around my homes isn't legally sound in CA, I will have to change my ways. 

    The easiest way is just do it all myself.

    The other option which might be cheaper in the long run is to hire one (only 1) employee to work on my own properties (am a 'builder-owner until CSLB license issued) and pay for WC insurance which I hear is what, $4 per $100 payroll issued?

    It would be way cheaper via employee than independent since I'm doing roughly half the work anyway, for example if I had accepted Mr. Handyman's $500 quote for painting house exterior labor only, I would still be doing half the work/painting anyway so why not hire someone with WC, pay them $11/hr and save lots of money that way. I mean, look at all the replies in this thread simply stating $500/labor to paint a house is cheap. It sure is!  But again, CSLB laws REQUIRE that $500 be paid only to a LICENSED contractor, NOT to any body else even if it was the neighbor or the neighbor's adult son that could really use the cash. I can only imagine how much this area's licensed contractors would quote me (a builder owner) just to paint some stucco... $5,000 maybe?

    As for this house time, to get out there and start painting by 8am! Neighbors, aren't they awesome! =D

    PS- I do think having any worker sign off (like you do) on the project once completed, agreeing they finished and thus no work is no longer left for them is simple and solid. However does it really have a standing at unemployment hearing once the worker claims he/she was given projects one after another for months on end and suddenly they stopped being needed? Sure hope so. 

    By the way, isn't even an hourly helper that is 'hired' also under some level of employment 'contract'? 

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  • Javier Marchena
    Investor · Winter Springs, FL · Member since 2010 · 165 posts · 68 votes
    11y

    $500 for painting a house on the outside is not that expensive, even here if Florida.

    I believe he can charge whatever he wants and you can pay whatever you want.

    He is not your employee as you described. If the prices he quoted you and your budget don't match, it may be time for him to find another GC and you another handyman to work.

    Nothing to get upset. It is only business. 

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  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    11y

    Disclosure: The article below does not constitute legal/professional content but only for educational purpose.

    @Account Closed Yes, if they get injured in your workplace, regardless of whatever, it will be on you. That is why I said CA law is pro employee. You are on the right path on the 1099, but always remember that if they go after you on that $500/job, you are still on the hook, not likely but it could happen. Basically, 1099 is useless here if "they" don't have a license either. There are some avenues that you could use, like no tax deduction piece work job (still you need to pay taxes and wc).

    LOL, no, here are my WC rates, carpenter 50%, plumber/electrician < 10%, painter/drywall 20%, roofer 100%, plus/minus 3% on all of them and then a premium deposit of more or less $10,000/year, I have a self-performing sub (only works by himself + 2 guys) and said he is paying about $4,000 for a $40,000 gross payroll. If you are an owner-builder, you do not need a license, only WC. If you have a job that somebody quoted 500 and you provide materials and you work at same time with him, CSLB would treat that as $500 labor for handyman + $500 labor from your work + $xxx material, so CSLB would treat that as more than $500 contract already, ridiculous, I know, but that's what they said.

    Your only escape to all this is, offer him/her 1-5% of the company, that way he is now treated as "owner", no more taxes, WC, etc - only a few bunch of papers that is authorized and notarized, $10 on notary fee and 1 hour of work.

    Yes it does, if they are not fired, and the reason for termination of employment is because of no work, it is not credited to me because of the reason that both me and the employee is not in control of the job that ended, CA has a point system that determines how much SUI (state unemployment insurance) rate you need to pay, a 1% difference of $100,000 in gross payroll is $1,000 (that is already my vacation fund!), and what if it is 4%? (edd/ui source attached at bottom).

    If you pay hourly/piece work job, it does constitute an employee/employer relationship.

    CA is expensive, with the $800 FTB yearly fee, plus WC, plus your city license. That alone is ridiculous.

    http://www.edd.ca.gov/pdf_pub_ctr/de231z.pdf

    1Reply
  • Michael Meeks
    Developer · Saraland, AL · Member since 2013 · 93 posts · 52 votes
    11y

    Post on Craigslist you are looking for help. Stop using him immediately. Voice your budget concerns, disclose you have posted the ad. You will possibly find new resources, and/or this guy may change his tune, if he needs to keep the income.

    1Reply
  • Rick BevilacquaPro Member
    18901 · Member since 2015 · 43 posts · 12 votes
    11y
    Originally posted by @Wayne Brooks:

    The CILB $500 max per "job" has absolutely no bearing whatsoever on what a fair labor rate for a job is.  You use that rule as an illogical reason for why a quote is not a fair price?  Sounds like you think handymen should do Every job, no matter what, for $500.?

     I was thinking the same thing as @Wayne Brooks.....

    0Reply
  • Brian Mathews
    Contractor · Round Rock, TX · Member since 2013 · 767 posts · 389 votes
    11y

    Everybody that lives in California knows how screwed up it is.   My question is why do you guys keep electing the same idiots that screw up your state?   I ask everybody the same thing on the national level.   Why keep electing the morons and ***** about it?   I vote against the incumbent everytime when I vote if they've been there more than 2 terms.   I'll vote for either party or neither party if I have a choice.  

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  • Account Closed
    OP
    Homeowner · Signal Hill, CA · Member since 2015 · 521 posts · 70 votes
    11y
    Originally posted by @Manolo D.:

    Disclosure: The article below does not constitute legal/professional content but only for educational purpose.

    @Account Closed Yes, if they get injured in your workplace, regardless of whatever, it will be on you. That is why I said CA law is pro employee. You are on the right path on the 1099, but always remember that if they go after you on that $500/job, you are still on the hook, not likely but it could happen. Basically, 1099 is useless here if "they" don't have a license either. There are some avenues that you could use, like no tax deduction piece work job (still you need to pay taxes and wc).

    LOL, no, here are my WC rates, carpenter 50%, plumber/electrician < 10%, painter/drywall 20%, roofer 100%, plus/minus 3% on all of them and then a premium deposit of more or less $10,000/year, I have a self-performing sub (only works by himself + 2 guys) and said he is paying about $4,000 for a $40,000 gross payroll. If you are an owner-builder, you do not need a license, only WC. If you have a job that somebody quoted 500 and you provide materials and you work at same time with him, CSLB would treat that as $500 labor for handyman + $500 labor from your work + $xxx material, so CSLB would treat that as more than $500 contract already, ridiculous, I know, but that's what they said.

    Your only escape to all this is, offer him/her 1-5% of the company, that way he is now treated as "owner", no more taxes, WC, etc - only a few bunch of papers that is authorized and notarized, $10 on notary fee and 1 hour of work.

    Yes it does, if they are not fired, and the reason for termination of employment is because of no work, it is not credited to me because of the reason that both me and the employee is not in control of the job that ended, CA has a point system that determines how much SUI (state unemployment insurance) rate you need to pay, a 1% difference of $100,000 in gross payroll is $1,000 (that is already my vacation fund!), and what if it is 4%? (edd/ui source attached at bottom).

    If you pay hourly/piece work job, it does constitute an employee/employer relationship.

    CA is expensive, with the $800 FTB yearly fee, plus WC, plus your city license. That alone is ridiculous.

    http://www.edd.ca.gov/pdf_pub_ctr/de231z.pdf

    And the CA/CSLB moral of the story is.. if you want to take on a $500 or more project, get a license that authorizes you to do so, Mr. Handyman/wanna-be Contractor! 

    As for my lesson learned, many thanks to Manolo! Manolo, I'll be doing work SOLO as builder-owner till my license in this crazy state materializes. Afterall, it is my property, so at least they aren't going to block me from 'paying myself' (saving) whatever it is per job I have been paying Mr. Handyman Jr *just* because I felt sorry for him not getting any work with his dad these days cause his dad continues to masquerade as a (licensed) contractor and quoting 'contractor' prices as if he's insured and everything, when he's not.

    If I do not incorporate but just wait for my contractor license to go thru (the business name they require applicants to chose on the CSLB application is in my case, simply my first and last name, as that's how I did biz in NY as a GC) do I still have to pay FTB $800/yr, and even if I dont do business my first year?

    Would probably only incorporate if my app never goes thru; I just submitted the additional documentation and its so weird their hotline only seems to allow a caller to talk to a live person ONLY if they are calling to report someone contracting without a license!

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  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    11y

    sole prop does not pay $800/yr, other than that, yes, and yes, even if you dont do business. Lol, crazy cslb just redirects you back to their web. Take those emotions out when you are doing business, it will bring you trouble.

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  • Account Closed
    OP
    Homeowner · Signal Hill, CA · Member since 2015 · 521 posts · 70 votes
    11y
    Originally posted by @Manolo D.:

     Take those emotions out when you are doing business, it will bring you trouble.

    De veras! 

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  • Jorge Antonio Diaz Pineda
    Member since 2024 · 1 post · 0 votes
    2y

    I think we can all agree on Materials .... Cross them out from the handyman negotiations. Thats your choice...I can get a faucet for 30 dlls, i can get a faucet for 500 dlls or more. Does that mean we get a 500 dllr faucet and it should ne installed free because thats the limit? Lets be serious here, if i get a 2000 dllr faucet i probably would NEED to have a licensed plumber install it to have a warranty on my investment, if you hire a handyman and he damages it. Youre out of luck that was your choice and know the pros and cons. 

    if you do have a good handyman you can count on that can do contractor type jobs, he knows and you know its gonna be cheaper. So, 500 for painting exterior stucco.... Im sure he and you know its probably a 1500 + contractor job. Paint...add 300 . 800 dlls for exteior paint vs 1500-3000? Get the numbers ... Make decision. Done . You have the right to choose as do the people working for us. Ill let him know  next job and we start all over... Theres no contract. Its a numbers decision for all parties.

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