Getting paid as a Sub-Contractor.

[George Ellerman]

I work for a company, and when I started with this company I was told I dont get paid until the company gets paid. Also there is work out there that I have not been paid on in over 6 months. I know some of the clients out there (AMC, lenders, mortgage companys, Etc.) dont pay until the loan closes(accepted or denied) but 6 months and some even a year old. Is this normal in the appraisal world? Do most companies only pay when they get paid by the client?

Your company is just as much a deadbeat as some of the mortgage companies are. They rely on playng the law of averages that some of their invoices will be paid while a good number of the appraisers in their stable hardly ever see enough to live on. As long as they are comfortable they could care less about your welfare. They rely on the fact that you want and need experience and that you are willing to put up with the non-payment nonsense. I've known jerks like this over the years. I'd tell them adios.

 

[Kevin A. Spellman]

I do know of a 1099 appraiser here in MA that was owed money. She filed for unemployment benefits for the money owed to her from the appraisal company. The appraiser prevailed and collected unemployment dollars. The owner lost thousands of dollars and shut down its operation. There was also a question of how much time the appraiser spent on the assignments. There were times the price paid to the appraiser was below minimum wages, another penalty occurred.

It is quite possible other forum members may argue this scenario, but I possess firsthand knowledge from both sides of the story from the 1990s.

One of the real dangers of a 1099 shop is Workman’s Compensation it is a law here in MA. You and the company owner must have a policy in place. It was a $10,000 fine back in the 1990s. I know of one company that paid this fine.

 

[Mike Garrett RAA]

I do know of a 1099 appraiser here in MA that was owed money. She filed for unemployment benefits for the money owed to her from the appraisal company. The appraiser prevailed and collected unemployment dollars. The owner lost thousands of dollars and shut down its operation. There was also a question of how much time the appraiser spent on the assignments. There were times the price paid to the appraiser was below minimum wages, another penalty occurred.

It is quite possible other forum members may argue this scenario, but I possess firsthand knowledge from both sides of the story from the 1990s.

One of the real dangers of a 1099 shop is Workman’s Compensation it is a law here in MA. You and the company owner must have a policy in place. It was a $10,000 fine back in the 1990s. I know of one company that paid this fine.

Another fine reason not to have any trainees!

 

[The Warrior Monk]

If you're an independent contractor, you are entitled to your pay when your work is complete. Whether or not the person that hired you collects the money from the client is not relevant.

 

[TEL2002]

JM, if you push the issue (which you should) plan on losing your job.

Find out if any of those loans closed. If they did, go after the lender to get paid. Tell your boss that you are gonna track down the deadbeats and get your money.

This is when you will probably get fired.

When I first started, my shop had the same deal. I got paid when they did. I had about a dozen outstanding fees. Got all the BS about how he could not collect from the deadbeats. Then I bought the business. Low and behold, the company had been paid on some of them.

I now firmly believe if you have that kind of arrangement, the company should have no problem showing you the books...to prove they were not paid....and show you what collections efforts they have made.

 

[MBD]

I've only subcontracted for 3 companies. Each of them pays the appraiser on a set time schedule, regardless of the status of their accounts receivable.

 

[Frederick]

My employees are not my partners. They do not share in the risks nor do they share in the rewards.

They get paid as employees every two weeks whether I get paid or not. That is the way it has been since 1986. They have Workmens Comp and Unemployment Ins. and buy into health Ins.

When I started my firm I worked my butt off and built up working capital. At one point I got a line of credit secured by real estate. I had close to 30 employees in the early 90s and a huge payroll. Today its a much smaller operation and easier to manage.

I don't believe in this "you get paid when I get paid stuff". When I first started in this business I worked that way and got screwed. I promised I would never do that to anyone and to remind me of it I kept a copy of one of my former employer's payslips he never made good on as well as a check he bounced to me. It was my motivator. Every time business got tough or cash was slow I opened my drawer and looked at it and felt kick in my azz and I got out there and made things happen.

Once receivables go over 90 days the chance of ever getting paid diminishes rapidly. If you operate on this basis; its not "if", its "when" you will be screwed.

If as an employer you can't pay people regularly you have no business hiring them. You are not a businessman. You are just playing businessman and playing with other people's livelihoods and the welfare of their loved ones. Being an employer is like being any kind of leader. There is a trust between you and those who give you the power to lead them. You serve them just as they serve you and if both of you hold up you end of the bargain there is prosperity.

I make no excuses and offer no apologies for the uncivil tone of my post. I have seen far too many people in this business taken advantage of.

 

[TN Pro]

I pay my subcontractors within 30 days, regardless of if i get paid or not. If its COD, they get paid the day after the funds clear.
As a businessman, i want my subs to give me their best work, why would they do that on a consistent basis if they think its going to be 3 months until they get paid.

Dean

 

[Webbed Feet]

<....... snip......>
I make no excuses and offer no apologies for the uncivil tone of my post. I have seen far too many people in this business taken advantage of.

Mr. Frederick,

You think the tone of your post is bad? You should be able to hear what I am thinking. It is exactly the kind of appraisal businesses being run as asked about in the O.P., and the people that will work for them, that have caused our industry all sorts of harm.

Webbed.

 

[Tudor]

OP

I used to work for a company like that. Every month I would have 3 or 4 appraisals that were not paid. Over a year and a half they started to add up, I was owed thousands when I finally decided to leave, took me another 6 months to get paid.

The shop would get about 100 to 150 jobs per month, enough of them would be paid every month to make him happy, gave him little incentive to go after the past dues.

The "You get paid, when I get paid" plan, SUCKS.