Red flags at an electrical company

The biggest red flags at an electrical company hit your check: a 1099 while they set your hours, checks that show up late, tool costs taken out of your pay, cash with no stub, and per diem used to shave your rate on a prevailing wage job. Each one costs you money or legal protection. Six of them are below, plus the 20-minute check to run on any shop before you take the job or while you're deciding whether to stay.

01The red flags at a glance

Here's the short list, what each one costs you, and the first thing to do.

A shop with none of these can still be the wrong move if the job is short or the check is thin, so weigh it with the whole-check comparison of two offers.

None of this is legal advice. Rules change by state, and your state labor department has the last word. The rest of your rights on the job, like travel time and overtime, are in electrician rights on the job.

02Is it legal to be on a 1099 when they set your hours?

Usually not, if they control the work the way a boss does. The IRS looks at three things: who controls what you do and how you do it, who controls the money side (how you're paid, who supplies tools and materials), and the type of relationship, including whether the work is a key part of the business (IRS).

A journeyman pulling wire for an electrical contractor, on the contractor's schedule, with the contractor's material, under the contractor's foreman, checks all three boxes for employee.

Here's what the 1099 costs you. Social Security and Medicare are 7.65% from the employer and 7.65% from the employee on a W-2 (IRS Topic 751). On a 1099 you pay both halves as self-employment tax, 15.3% (IRS). Say you make $70,000. The employer's half the shop skipped is $70,000 x 7.65% = $5,355 a year, before the adjustments the self-employment tax rules allow (our math). You also lose overtime protection, and usually workers' comp if you get hurt.

If you think you're misclassified, you or the shop can file IRS Form SS-8 for a ruling. The IRS says it can take six months or more. A worker treated as a contractor when he's an employee can use Form 8919 to report his share of Social Security and Medicare (same IRS page).

03What if my paycheck keeps coming late?

Late once with a reason is a hiccup. Late twice is a pattern, and it usually means the shop is waiting on the GC to pay before it can make payroll.

That's a cash problem, and cash problems end jobs. Write down every payday and the day the money actually hit. Your state labor department sets payday rules and takes wage claims. The U.S. Department of Labor's Wage and Hour Division takes complaints at 1-866-487-9243, and it says complaints are confidential and an employer can't retaliate against you for making one (DOL WHD).

A shop that's late on payroll is often late paying the supply house too. If material stops showing up on site, believe what you're seeing.

04Can they take tools out of my check?

Under federal law, only up to a point. Tools you use for the job count as being for the employer's benefit. The shop can't deduct their cost if it drops your pay below the $7.25 federal minimum wage or cuts into overtime you're owed, and it can't get around that by having you pay it back in cash (DOL Fact Sheet 16).

For a J-man at $35 an hour, that federal floor rarely bites on a normal week. So your state's rule matters more. California, for one, says an employee is "entitled to be reimbursed" for work expenses and losses, and an employer generally can't deduct for accidental breakage or loss (California Labor Commissioner). Check your state labor department's page on deductions.

A shop that wants you to own a good set of hand tools is normal. The flag is a shop that charges you for the cordless kit, the bender it lost, or the meter somebody dropped off a lift.

05Is it a red flag to get paid in cash?

Yes, when there's no pay stub and no W-2 at the end of the year. Cash with nothing on paper means no record of your hours if you ever have to claim overtime, and if the shop isn't reporting your wages, nothing is going toward your Social Security.

It also tends to come with no workers' comp. Get hurt on a cash job and you find out fast who was covered. If you take cash anyway, keep your own log: date, hours, job, and amount paid. Photos of the sign-in sheet help.

06Is a new foreman every month a red flag?

It's a smaller flag than the money ones, but it's real. Foremen leave when the PM doesn't back them, material doesn't show, or the estimate was so low the job can't be built on budget.

Any of those land on you. You get rework, a crew that's always short, and nobody who'll stand up for you when the GC pushes. Ask a hand on site, not the office, why the last two foremen left. If you're the one being offered the foreman spot, ask the same question twice.

07Can they cut my rate and call the difference per diem?

On a prevailing wage job, that's a question for the Wage and Hour Division. Under the Davis-Bacon Act, "wages" means the basic hourly rate plus listed fringe benefits like health, pension, vacation and apprenticeship costs (40 U.S.C. 3141). Per diem isn't on that list. The law also says covered workers get paid "unconditionally and at least once a week," with no "subsequent deduction or rebate on any account" (40 U.S.C. 3142).

So check it. Federal wage determinations are public on SAM.gov. Find the one for the job's county and look up the electrician line. If the base rate there is higher than the rate on your stub, and the shop is covering the gap with "per diem," call WHD. On private work with no wage determination, a lower rate plus per diem can be legal. Just compare it on the whole check, and know that per diem that reasonably covers expenses is left out of the regular rate your overtime is figured on (29 CFR 778.217). Every dollar moved from rate to per diem is $1.50 less in every overtime hour.

08How to check out an electrical company before you take the job

Twenty minutes of looking can save you a bad six months. Run these five checks.

1. Look up the contractor's license on the state board. Most states have a free lookup. Washington's Verify a Contractor, Tradesperson or Business tool searches by name or license number, and Minnesota's license lookup shows status and enforcement actions. No license, or an expired one, and you're done.
2. Search OSHA inspections. The OSHA establishment search lets you look up a company by name and state and see its inspections and violations. One citation in ten years isn't news. A string of serious ones is.
3. Read reviews for patterns, not single rants. On Indeed and Glassdoor, one angry review means little. Five that say "late checks" or "laid off when the job ended" mean a lot.
4. Ask about the GC. Find out who the GC is on the job they want you for. A GC known for slow pay makes every sub tight on cash.
5. Ask around. The counter guys at the supply house know which shops pay their bills. So do the hands who left. If you know one, call him.

Then ask the shop your questions straight. Questions to ask an electrical contractor before you take the job has the full list, from per diem days to when insurance starts. If the answers are all "plenty of work," read how to tell if an electrical job will last before you give notice.

09When red flags mean it's time to look around

One flag with a fair answer is just a shop with a problem. Two or three money flags at once is a shop that's going to cost you.

Before you decide anything, see what the move is really worth. How to compare two electrician job offers puts the whole check side by side, so you don't trade a late-check shop for a short job.

Run your Pay Check to see what electricians with your license make near you. Takes about a minute and your boss never hears about it.

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