Full Time Maintenance Person

Started by NancyM15 • 14 replies • 1840 views

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NancyM15 (Arizona)
Posts: 7

Posted:

Concern about how two board members voted to increase salary and bonus. One thousand in Dec and now increase of $400 a month effective immediately. There is no criterion for pay increases, just that it had not had an increase in three years. I asked them to develop criteria but they voted to study it next year. Any guidance or suggestion when dealing with a full time maintenance person? He does not live in the property and we have a contract. He is GREAT and has been with us for over decade, but I feel that an increase of $4,800 without explanation seems "not right or least questionable". Am I been overly concern?. Any rules that covers this area?

KerryL1 (California)
Posts: 14,550

Posted:

Are you saying that this "great" full-time maintenance person was being paid only $1,000 a month??!! That's under the poverty line for one person. How many homes/units are there in your HOA? What are his duties?

In addition, is he an employee of your HOA or does he work for an outside vendor?

Are you on the Board, Nancy? How many are on the board? In other words, are the two who voted for the raise, a majority of directors?

There probably is a cap in AZ on how much dues can be raised without a vote of Owners, but I don't know what it is. If the $00 a month is under that cap, then, yes, it would be legal (I'm not in the legal professions).

NancyM15 (Arizona)
Posts: 7

Posted:

I apologize. He is independent contractor. The $1,000 was for a Christmas Bonus. He takes care of everything, landscaping, broken pipes. Etc. Only 10 building (80 units). Board has only four members and three voted for it. They did not increase the dues... .I do not take the comments as legal advice. Thank you for your comments.

KerryL1 (California)
Posts: 14,550

Posted:

Are you saying that this "great" full-time maintenance person was being paid only $1,000 a month??!! How many homes/units are there in your HOA? What are his duties?

Wait, was the $1,000 a bonus? If so, what was his monthly wage before the $400 raise?

In addition, is he an employee of your HOA or does he work for an outside vendor?

Are you on the Board, Nancy? How many are on the board? In other words, are the two who voted for the raise, a majority of directors?

There probably is a cap in AZ on how much dues can be raised without a vote of Owners, but I don't know what it is. If the $400 a month is under that cap, then, yes, I think it would be legal (I'm not in the legal professions).

TimB4 (Tennessee)
Posts: 21,062

Posted:

Since the individual is an independent contractor working under a contract, the fix is to always bid out the contract every time it's up for renewal. That doesn't mean that you should get rid of the person if they are doing a great job. However, by bidding out the contract, you get a better sense of what the going rate should be.

MarkM31 (Washington)
Posts: 556

Posted:

Does this independent contractor have other gigs? Or does he spend all his time on your HOS's property. That isn't a lot of money either way, especially given the fiduciary responsibilities of a contractor.

I doubt he would pass the sniff test for being an independent contractor anyway

NancyM15 (Arizona)
Posts: 7

Posted:

He spends all the time in the property plus he comes at any time if there is an emergency. No bids, contract is very simple. Make 40K. I assumed based on the previous comments that you all believe that $400.00 (a month) pay increase is fair. I believe tying the pay increase with the COLA. Instead of waiting 3-years to catch up.

TimB4 (Tennessee)
Posts: 21,062

Posted:

We don't know if a $400/month (i.e. $4,800/yr) raise is good or bad as we have no idea what the terms of the contract are. $4800 raise on a $40K salary is a 12% increase.

Since your Board is not getting bids for a maintenance contract, it's likely your Board doesn't really know if such an increase is good or bad. If the going rate in your area for this type of work is $60K, you may have a good deal going on. If the going rate is $30K, you are overpaying but the service you receive may be worth it.

When you were on the Board, did you ever get bids for a maintenance contract? If you did, what was the going rate at that time?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Nancy

If was making $40K a year (as you said) and he got a $4.8K raise (plus a $1K bonus) he is now making $44.8K a yer. If he is as good and as reliable as you say he is then I would say he is well worth it.

MarkM31 (Washington)
Posts: 556

Posted:

Quote:

Posted By NancyM15 on 03/05/2015 10:11 PM
He spends all the time in the property plus he comes at any time if there is an emergency. No bids, contract is very simple. Make 40K. I assumed based on the previous comments that you all believe that $400.00 (a month) pay increase is fair. I believe tying the pay increase with the COLA. Instead of waiting 3-years to catch up.

He sounds like an employee, and not a legal contractor.

Does he charge extra for emergency responses?

Read it and weep

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

JohnB26 (South Carolina)
Posts: 1,001

Posted:

total cost of maintenance person = $46 per month per home

? bargain ?

? when IRS catches you, still a bargain ?

Form SS-8

If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.

BEST OF LUCK

NancyM15 (Arizona)
Posts: 7

Posted:

Thank you all for your inputs. I understand the issues better. Paying per apartment makes sense.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

you misunderstood

the $46 per unit per month was the cost to the HOA per unit assuming equal assessments

the HOA is responsible for the maintenance of the common elements

the funding comes from the owner's assessments

NancyM15 (Arizona)
Posts: 7

Posted:

I understood that you meant $46 per unit per month to take care of the property and the payment to the contractor comes out of the HOA monthly fees. What was it that I did not understand?

JohnB26 (South Carolina)
Posts: 1,001

Posted:

If employee: pay by hour worked

If contractor: pay by unit serviced

ps.
unless person sets their own hours (within contracted scope of work) they will probably be considered an employee

? when they fall ill ?

? vacation time coverage supplied at no additional cost by 'vendor' ?

? on the job injury insurance coverage ?

y'all have merely been lucky SO FAR

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