Trade contractors generally pay laborers by the hour, or by the piece installed on a weekly or biweekly basis. Let’s look at the pro’s and con’s of each.
By the Hour:
Pro(s) – Laborers are paid a rate per hour for the time they work, capping their cost and making it easier to control the amount of hours employees work. Some workers will want to work as many hours as possible.
Con(s) – Laborers are generally paid an additional 1/2 time the rate for overtime. The employer needs to monitor the performance of the worker and watch the hours to make sure that the laborers work consistently and continuously.
By the Piece:
Pro(s): You only pay them for the units installed, regardless of how long it takes someone to complete a unit.
Con(s): When paid by piece, employers needs to watch to make sure the guys don’t blow through the material and claim they used more than expected. When workers are paid per piece, they are not necessarily the most careful or do the best job, and they are often nowhere to be found for the little corrections that are a common part of what we call the punch list.
Generally, laborers like to be paid on a weekly basis. When they know they are getting a steady paycheck every week they are more likely to continue showing up. Laborers have been known to go from one employer to another for the same pay, just because the new one pays more often. While it’s easy to feel like laborers don’t care about anything except getting paid, as much as possible – it’s important to remember that many really do care about doing a good job. You just have to take the time to make sure they understand the expectations.
