*Madmary's Cleaning Services

  • Posts: 32
Why low wages for cleaners?
« on: January 04, 2007, 04:41:20 pm »
We started in business just 18 months ago.

Before this, we worked for employers in the cleaning sector for a pittance hourly rate.  (mainly in 'new-build')

With a bit of ambition, hard work, blitzing the credit cards and lots of luck, we managed to get our foot in the door with a major developer.  Although it is still relatively early days, our gross income in that time is around £72.000

We are a 2 person partnership and have only one part-time employee (15 hours per week - her choice)

Our single employee is a fantastic worker and we would miss her badly if she left us.  Worth her weight in gold (well almost)  We pay her a very good rate of pay compared with the rates we know about and see in the local job sections.
We allow holiday entitlement at 2 fifths of fifteen days per year: (DTI Guidlines for part-time workers - Regulation 2002(SI 2002/2035 EC Directive on part-time work - Prevention of less favourable treatment)

I won't say exactly how much we pay her, but I can tell you the two main reasons we pay a fair bit more than the going rate:

When you have a good worker - why pay them a pittance and risk lossing them?  Or worse, they go it alone and nick your contracts!


The contribution our employee makes to our business is worth thousands (maybe tens of thousands)
Yes, we understand that wages have to be paid, sometimes months before we get the return from the work carried out - but that aside:

To us, that is probably one of the best investments we have ever heard of!

Maybe we are being naive? (all sensible replies welcome)

So back to the topic...

Why low wages for cleaners? (or anybody for that matter?)

martin19842

  • Posts: 1945
Re: Why low wages for cleaners?
« Reply #1 on: January 04, 2007, 04:55:36 pm »
hi there

youve answered your own question really

what you have to look at is running costs of your business, you have quoted gross figures of income, you then have your running costs to deduct.

you also need proit-- profit pays for new equipment, expansion, and also smoothes the ride if you loose an important customer.

therefore labour costs are constantly under pressure, to be tightly controlled.

you as the owner, director, or operaor of the business, will earn a wage, and then a dividend from the profit.

yes i agree that amployees are important to your business, well infact customers and employees are both as important as each other, the lack of either and you are in difficult situation.

but the stark reality is that you made a decision to run your own business, there are many reasons why people do that, and one of those reasons is for a better lifestyle, and unfortunatley that at some time includes money, earnings.

therefore owners, managers, key people with in the business will always earn more than some of the employees.

the bbc series "back to the floor" illustrated it most graphically, the differences, between employees and employers.

i have employees, and sub contractors, they are paid well and are treated well , but i am also in business to provide myself with a better standard of living, and actually, to provide for my children, who in years to come will be wanting cars and motorbikes, and driving lessons etc,  and there is no way i could afforded those if i carried on working for an employer, so istarted to work for myself, i work hard and therfore reward myself well.

its only an opinion.

regards

martin

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #2 on: January 04, 2007, 05:24:20 pm »
Martin,

Valued opinion mate.

Completely understand about partner wages, profit dividends etc.
Also understand that wages DO form a large part of any business expenditure.  And in running a business it is very important to consider this when tendering for contracts. (especially in the early days - as this money has to be found in the first place)

Paul Coleman

Re: Why low wages for cleaners?
« Reply #3 on: January 04, 2007, 05:30:31 pm »
We started in business just 18 months ago.

Before this, we worked for employers in the cleaning sector for a pittance hourly rate.  (mainly in 'new-build')

With a bit of ambition, hard work, blitzing the credit cards and lots of luck, we managed to get our foot in the door with a major developer.  Although it is still relatively early days, our gross income in that time is around £72.000

We are a 2 person partnership and have only one part-time employee (15 hours per week - her choice)

Our single employee is a fantastic worker and we would miss her badly if she left us.  Worth her weight in gold (well almost)  We pay her a very good rate of pay compared with the rates we know about and see in the local job sections.
We allow holiday entitlement at 2 fifths of fifteen days per year: (DTI Guidlines for part-time workers - Regulation 2002(SI 2002/2035 EC Directive on part-time work - Prevention of less favourable treatment)

I won't say exactly how much we pay her, but I can tell you the two main reasons we pay a fair bit more than the going rate:

When you have a good worker - why pay them a pittance and risk lossing them?  Or worse, they go it alone and nick your contracts!

But my main topic of contention is this:

WE GET THE WAGES WE HAVE PAID - BACK - WHEN WE FILE THIS YEARS TAX RETURNS!

All we lose is a bit of National Insurance - amounting to a couple of hundred quid!
The contribution our employee makes to our business is worth thousands (maybe tens of thousands) and all it costs is a few hundred!
Yes, we understand that wages have to be paid, sometimes months before we get the return from the work carried out - but that aside:

To us, that is probably one of the best investments we have ever heard of!

Maybe we are being naive? (all sensible replies welcome)

So back to the topic...

Why low wages for cleaners? (or anybody for that matter?)

Apart from the other things mentioned, it is a matter of supply and demand.  If you put an ad in the paper for a couple of cleaners, you will get all sorts of people applying - including many who just aren't up to it.  I do realise that good quality cleaners are a valuable asset to a business and are a different breed to someone who just wants a few hours a week to fill in for a couple of months.
I suppose the best way is to start people and offer a good pay rise once you've seen that they can do the business.
Around my way the rates are kept low because I live in a high immigration area.  That's not a negative comment about immigrants but if someone's English language is a bit flakey, they can still do cleaning whereas they might struggle in many other lines of work.  I've known some well qualified people do cleaning work until their English improved and they found their way around.

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #4 on: January 04, 2007, 05:43:45 pm »
Hey Shiner,

Good answer, Didn't think of 'allsorts' applying for the job because the wages are better.

However, we knew our employee before taking her on and, dare I say it?  She had done a few 'cash-in-hand' days with us before we could afford to offer her regular hours 'on-the-books'

It always worries me when people mention things like "high immigration areas" and things like that.  If these immigrants are 'on-the-books' and paying tax and NI, then why should this lower local wages?  Is it because they will work for less? If so, then surely it is then the fault of the employer offering lower wages - and this just brings us back to the original question - WHY?

A Cleaner is a Cleaner, is a Cleaner, regardless of status - so long as they can do the job!

Cheers

jasonl

  • Posts: 3183
Re: Why low wages for cleaners?
« Reply #5 on: January 04, 2007, 05:51:27 pm »
MAD MARY,, you cant claim it all back as such!!!!!!! you are merely off setting the cost against your tax liability, assuming you are a sole trader,,  for example

 scenario 1...you  do a clean for £100,  your costs , fuel,materials etc are £20  so you have made £80 profit  and you nw owe the taxman 24% of £80= £19 odd .

scenario 2 if you employ some one and give them £10 to dothe job you only made £70 so you now owe 24%of £70= £16.50 odd tax.

scenrio 3 if you are like you say ,generous and pay your cleaner £30 you only made £50 profit and only owe £12 tax.

so you see
by doing it yourself you have £61 in  your pocket.

 by paying a low wage  you have   £53.50 in your pocket

by paying a high wage you have only £38 in your pocket

This is because , the amount you pay does not ALL come off your tax bill, jut the percentage of your tax, which is why in an industry like cleaning , of high labour intensity, and tight margins , wages tend to be low.

I know this is over simplified because of vat and the 18% construction tax etc , but you can see the principle.I always favour paying slightly above normal rates, but by using low cost/no cost rewards, eg , when handing over payslips ,a simple' thankyou for your hard work' does wonders for morale, if its a workers partners birthday etc an extra £20  here and there, let them borrow your flash car for a weekend, let them go home a couple of hours early on a friday, buy them lunch the list goes on.


I clean carpets
I dry Buildings

dustdees

  • Posts: 334
Re: Why low wages for cleaners?
« Reply #6 on: January 04, 2007, 05:55:53 pm »
Hi All,

Happy New Year,

I too, as most sucessful people in ths forum, pay our employees and good rate of pay. But you still have to consider the employee working conditions as well. For instance you could be paying that employee thousands of pounds, but if they are not happy then they will always go and look for a position elsewhere paying the same amount of money, but the working condtions will make them happier.

With regard to the reply regarding immgrants, bearing in mind that if they are legal, I don;t have a problem with that, but your right they are learning the english language, but they must be able to understand a basic instruction, and to be honest, in the domestic market, it's always a very good idea that the cleaner can communicate with the client as in somecases the client is on site.

Also when working out your hourly rate you need to consider what the local rate is as well(i.e the North South divide!!!)

Whatever pay rate you pay them they will never be with you for life, there is always some better around the corner, or people circumstances change!! To me it sounds as if you have been lucky with your first employee, but I would't expect that as the norm!!!


Paul Coleman

Re: Why low wages for cleaners?
« Reply #7 on: January 04, 2007, 06:04:04 pm »
Hey Shiner,

Good answer, Didn't think of 'allsorts' applying for the job because the wages are better.

However, we knew our employee before taking her on and, dare I say it?  She had done a few 'cash-in-hand' days with us before we could afford to offer her regular hours 'on-the-books'

It always worries me when people mention things like "high immigration areas" and things like that.  If these immigrants are 'on-the-books' and paying tax and NI, then why should this lower local wages?  Is it because they will work for less? If so, then surely it is then the fault of the employer offering lower wages - and this just brings us back to the original question - WHY?

A Cleaner is a Cleaner, is a Cleaner, regardless of status - so long as they can do the job!

Cheers

No it's not so much "working for less".  It just means that there are a lot more people chasing the same type of work.  Laws of "supply and demand" kick in.  Having said that, if an immigrant comes from an country where they have been very poor, even a modest hourly rate over here looks decent to them.
I just want to emphasise that I attach no blame for this to immigrants as I would probably do exactly the same if I were in their situation.

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #8 on: January 04, 2007, 06:05:11 pm »
Hey Jason,

Wish I had a flash car lol.
Apart from my little Combo Van, anybody can borrow my Skoda!
Any takers? -  Didn't think so! He He.

Yes, mainly we are taxed at 18% under the Construction Industry scheme.

Another thing to bear in mind:
We employ people because we need them to do work for us.
Simple calculation:
Work requires worker, no worker = no work done = no profit!

 Cheers

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #9 on: January 04, 2007, 06:17:23 pm »
Hey Dustdees

And the best new year to you too.

I agree we may have been lucky with our first employee.  That's why we don't want to lose her!  We don't want our second employee to be her replacement!

Yup! Keep em happy too!

Wish all employers thought like us - but then I would probably still be working for somebody else, right?

Keep em coming...

martin19842

  • Posts: 1945
Re: Why low wages for cleaners?
« Reply #10 on: January 04, 2007, 06:25:21 pm »

hi there

you may want to consider becoming a ltd company, as then you can offset your monthly cis deductions against your monthly paye declaration, aids cash flow

another advantage being dividend payments upto £10k are at a lower rate of 10%

at the present time as a sole trader you submit your tax return along with your cis vouchers, and you would hope that the cis deductiins you have made during the year cver any tax payable, r better still a rebate.

in your accounts the paye and wages deductions are deducted as expenses, again leaving a level of profit.

regards

martin

Fox

  • Posts: 824
Re: Why low wages for cleaners?
« Reply #11 on: January 04, 2007, 06:26:39 pm »
Ok - is anyone else confused or am I just being my usual 'blonde' self!

Quote
My accountant assures me that the wages are a seperate issue to the Tax.
The Employers PAYE Scheme stands alone. Hence, the full wage bill is re-claimable - less NI etc. and is not an offset of tax.
Someone tell me if my accountant is wrong!

Who are you going to reclaim your wages from?  I wish I could I'd have made a fortune!  

Jason is correct - all wages come off your bottom line as a direct overhead/cost.  You as an employer will pay NI along with the employee if they are paying it - PAYE is the tax and NI of an employee deducted from wages and paid to the revenue, the only things reclaimable are rebates on tax codes sent to you or benefits paid eg: SSP, Maternity/parental etc and that is only if your paying out more than a certain % of your payroll.

At the end of the year the wages you have paid are deducted from your turnover just like the other costs and overheads, tax is then worked out on your profit.

Fox  

martin19842

  • Posts: 1945
Re: Why low wages for cleaners?
« Reply #12 on: January 04, 2007, 06:30:21 pm »
hi there

fox, i did a quick google to see if i was missing a new scheme, but havent been able to find it.

so i do agree, wow if i could reclaim all my wages, i'd be over the moon

regards

martin

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #13 on: January 04, 2007, 07:05:41 pm »
Ok, now you got me worried!

Too confusing - that's what the accountant is for! I'm just a cleaner! Help! :P

I am printing off this board and grabbing my accountant by the throat first thing in the morning. lol  :P is that a'choking' smiley?

Back to low wages for cleaners?

Fox

  • Posts: 824
Re: Why low wages for cleaners?
« Reply #14 on: January 04, 2007, 07:16:40 pm »
Quick reply as am off out of the office shortly.

I pay between £5.50 and £7.00 per hour depending on job and where/what time it is.  I don't feel this is a low rate for a job where someone with no qualifications or formal training is required. 

Cleaners wages are on par with other unskilled workers around the country.  I know this post is going to come round to it so I'll say it first - wages are also based on the amount customers are willing to pay for our services (I know we should re educate before anyone starts!).

I definately think you do need a trip to your accountant for an explaination!  If he/she says you defo can claim it back then please post where from here and make alot of us happy! (I wish!) ;) ;D

Fox

*Chris Browne

  • Posts: 863
Re: Why low wages for cleaners?
« Reply #15 on: January 04, 2007, 10:22:01 pm »
I also pay a good wage, i have no one on less than £6.00 and the average is probably around £6.50, but anyway who cares? i,m off to claim it all back and live happy ever after ;D ;D ;D ;D ;D ;D

ps. is that why they call you "mad" mary?....only joking ;D ;D


Chris ;)

dustdees

  • Posts: 334
Re: Why low wages for cleaners?
« Reply #16 on: January 04, 2007, 10:36:45 pm »
I'm phoning the accountant in the morning to reclaim all my wage expenses too!!

Looks like running a business does make you loads of money, I think I will go to the garage and put an order if for my dream car!!! HAPPY NEW YEAR ALL

Sound like we will be all rolling in it at the end of 2007

HAPPY DAYS!!!!!


Let's face it if it was true, why would anyone want to be employed by us!!!!

Come on MadMary, wake up to the real world. I would check to see if you accountant is qualified!!!!!

KarlJones

  • Posts: 394
Re: Why low wages for cleaners?
« Reply #17 on: January 04, 2007, 10:43:50 pm »
I am glad you can see what she is doing for you, but do not undersell you sales team, your book keepers, your managers, your receptionist, your quality control team, your buyers or your investors.

They all take a slice of the pie.

I put salesman first because who would you pay the most?  The cleaner or the person who got the contract for you?  How much would you pay a salesman to get you enough work to keep you in 72k gross forever?

Do not undersell yourself to your own self, understand exactly how important you are and reward yourself for not only the risks you have taken but also the
sales you have made.

What would the company he without her and what would it be without you?

Be as nice as you can to her, reward her and value her, but do not under value
yourself.

Lets just clarify something else, you do not get the wages back.  If you did it would mean the tax man was paying her and not you.  If it were the case I will work for you and you can work for me, no worries the tax man would be the only person paying.  This is called a sham (legal term), and it is illegal.

What you can do is deduct her wages from your profit (obviously) and claim the "tax" back on that (the resulting profit) amount. 
wages are a running cost.
turnover minus running cost = taxable profit.
You cannot plough a field by turning it over in your mind.

*Madmary's Cleaning Services

  • Posts: 32
Re: Why low wages for cleaners?
« Reply #18 on: January 05, 2007, 09:31:35 am »
Hey Guys,

'Cat amongst the pigeons' or what! (I think I spelled that right)

Got ya talking - now keep to 'why low wages for cleaners!'

I knew someone would get round to "don't forget your office staff" (not a quote - just my interpretation)

As I pretty much run the paper side of this business, I am office staff too - but I also have to go out and clean.  Sounds almost as though KarlJones has always been in 'management' or 'sales'? Correct me please....

My problem is, I have always been on the ground floor working in the field, so-to-speak, for someone else. Got 30 odd years of distrust to get over!


Again, back to the question...

dustdees

  • Posts: 334
Re: Why low wages for cleaners?
« Reply #19 on: January 05, 2007, 03:47:15 pm »
Madmary,

How can you say they are non productive? If they are not then why bother having them, businesses won't run with out them.

May I remind you that some sales staff are office based, are they non productive?

I find it hard so see your point on this subject and to be honest some of the points that have been made regarding clawing back wages make me smile.

If you already knew your staff member before you too him/her on, then friends and family will be loyal to a certian degree.But I would proceed with caution on that one as they will leave at some point!!!

Regardless of whether you have office staff, field based staff your business would not run without them, so they are all as productive as one another.

Very poor comments, for someone who seems to have a turnover reasonably high for such as sort time.

I don't think you will get the answer you are looking for, whatever it is!!!


martin19842

  • Posts: 1945
Re: Why low wages for cleaners?
« Reply #20 on: January 05, 2007, 05:34:45 pm »
hi there

what is the definition of low???

the other interestng point is....

there are far to many people selling on price, and therefore they can only afford to pay low wages,

where a contract is won under tupe, you'll find that wage levels generally dont rise.

why does a potential customer change their supplier???

primarily becuase they want a better service or they want to reduce their cleaning expenditure..

the result of that ......   relatively low wage levels.

unfortunately some sectors of the cleaning industry are regarded as unskilled jobs, whilst others can be classed as skilled labours.

for example

an IPAF qualified cladding cleaning operative ---  will earn more than

the unskilled cleaner who cleans an estate agants office two hours a day.

regards

martin

Paul Coleman

Re: Why low wages for cleaners?
« Reply #21 on: January 05, 2007, 06:02:50 pm »
Ok, now you got me worried!

Too confusing - that's what the accountant is for! I'm just a cleaner! Help! :P

I am printing off this board and grabbing my accountant by the throat first thing in the morning. lol  :P is that a'choking' smiley?

Back to low wages for cleaners?

let's face it.  If you could claim it all back you could put them all on 50 grand a year and let them treat you once in a while  :)

myvanwi

Re: Why low wages for cleaners?
« Reply #22 on: December 22, 2007, 04:27:26 pm »
We started in business just 18 months ago.

Before this, we worked for employers in the cleaning sector for a pittance hourly rate.  (mainly in 'new-build')

With a bit of ambition, hard work, blitzing the credit cards and lots of luck, we managed to get our foot in the door with a major developer.  Although it is still relatively early days, our gross income in that time is around £72.000

We are a 2 person partnership and have only one part-time employee (15 hours per week - her choice)

Our single employee is a fantastic worker and we would miss her badly if she left us.  Worth her weight in gold (well almost)  We pay her a very good rate of pay compared with the rates we know about and see in the local job sections.
We allow holiday entitlement at 2 fifths of fifteen days per year: (DTI Guidlines for part-time workers - Regulation 2002(SI 2002/2035 EC Directive on part-time work - Prevention of less favourable treatment)

I won't say exactly how much we pay her, but I can tell you the two main reasons we pay a fair bit more than the going rate:

When you have a good worker - why pay them a pittance and risk lossing them?  Or worse, they go it alone and nick your contracts!


The contribution our employee makes to our business is worth thousands (maybe tens of thousands)
Yes, we understand that wages have to be paid, sometimes months before we get the return from the work carried out - but that aside:

To us, that is probably one of the best investments we have ever heard of!

Maybe we are being naive? (all sensible replies welcome)

So back to the topic...

Why low wages for cleaners? (or anybody for that matter?)

You are doing well to have that turnover in such a short amount of time.  You must be doing all the right things. How did you get into the builders cleans?
We have contacted all the big developers in our area and cant get anyone to speak to us or reply to letters. We have spoken to the site agents who all point us in the direction of their head offices.

Small but perfectley formed

  • Posts: 1742
Re: Why low wages for cleaners?
« Reply #23 on: December 23, 2007, 11:54:51 am »
supply & demand keeps prices for work low lots of competition mainly from people just earning a income from their business not making real profit
Spit and polish

Ian Gourlay

  • Posts: 5748
Re: Why low wages for cleaners?
« Reply #24 on: December 23, 2007, 02:38:30 pm »
Just like to say you have not done the business until you get paid.

With the Credit Crunch prices dropping a lot of builders will go bust