Episode 90: 1099 Independent Contractor or W-2 Employee: Breaking Down the Difference with Rich, Javier, and Dustin

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This episode threw quite a curveball at us, we were on our way to Long Beach and were prepared to record our final stop of the live tour when we found out that the city was recommending to not have large group gatherings. We decided it was in the best health interest for everyone if we canceled the event. We were pretty bummed about it but we adjusted and changed it to a Facebook Live, as well as an epic podcast episode. We turned our Air BNB into a recording studio and off we went! We sat down with our good friends Rich Gallo of Pure Swim, Javier Payan of Payan Pools, and Dustin Anderson of Precision Aquatics to discuss 1099 Independent Contractors and W-2 Employees. With the new AB-5 Law coming out in California, there have been a lot of questions surrounding this topic and we wanted to shed some light on what it means and how to adjust to it if necessary. 

All 3 of the guests, as well as us, have dealt with both independent contractors and employees so during the episode we share our experiences. The overall goal of this podcast was to define each one so that businesses could figure out where they fit into the conversation and help make the transition if necessary. There is a lot of negative talk surrounding this, but we tried to stay positive and make suggestions that will overall make the industry better. When we were running Brothers Pool Service this topic was always being discussed between us and since we started Pool Chasers, it has been one of the most asked for topics. We hope you get a better understanding of it and get as much out of this episode as we did.

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Show Guests

• Rich Gallo of Pure Swim in Los Angeles, CA. Website Facebook Instagram

• Javier Payan of Payan Pool Pool Service in San Diego, CA. Website Facebook Instagram

• Dustin Anderson of Precision Aquatics in San Diego, CA. Website Facebook Instagram

Show Notes

• [03:16] How have Independent Contractors been used in the pool industry? 

• [05:20] Did you ever have independent contractors work for you? 

• [16:34] The relationship between the independent contractor and the owner

• [34:32] Employees going to the unemployment office right now during Coronavirus 

• [37:38] AB 5 Law passed in California 

• [51:02] Delivering quality service

• [55:25] There is nothing wrong with being a Sole Proprietor 

• [01:03:20] The ABC’s broken down

• [01:06:48] Staffing Agency 

• [01:16:16] The steps in making an employee

• [01:41:09] The liability levels

Mentions & Resources

• Dynamax Decision: https://poolchasers.link/dynamex-resource-90

• AB-5 Law: https://poolchasers.link/ab5-resource-90

• 1099 Instructions: https://poolchasers.link/1099-resource-90

• W-2 Instructions: https://poolchasers.link/w2-resource-90

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Tyler Rasmussen:
Thank you for joining us today, on episode 90 of the Pool Chasers podcast, as always, our mission is to help educate and inspire in the form of a podcast. Well, we had quite a curveball thrown at us with this episode. Let me tell you, we drove all the way out to Long Beach and were prepared to do our final stop of the live tour, only to find out that the city was suggesting not having large group gatherings. We decided that it was the best health interest for everyone that we canceled the event. We were pretty bummed. But, you know, as always, we adjusted and we're still able to record an epic episode with our friends Rich, Javier and Dustin. During the episode, we define what a 1099 independent contractor and a W2 employee are and how they are typically used in the industry. We discuss the advantages and disadvantages of both. We also discuss a new AB-5 law in California and how is affecting the industry as well as how to adjust to it. It's a great conversation. Help everyone get prepared for what might make its way through the country. The overall goal this episode was to help businesses figure out where you fit in this conversation and help make the transition if necessary. I know when we are running brothers that this topic was always being discussed between Greg and I. And since we started pool chasers, it's one of the most askfor topics. We hope this episode will help you get a better understanding of it. Please enjoy this episode with Rich Gallo, Javier Payan and Dustin Anderson.

Intro:
Welcome to your go to podcast for the pool and spa industry. My name is Tyler Rasmussen. My name is Greg Villafana and this is the Pool Chasers Podcast.

Greg Villafana:
Thank you guys very much. Appreciate you taking the time to be here with us.

Greg Villafana:
Really looking forward to this podcast episode. Thank you for having us, man.

Greg Villafana:
So can you all please introduce yourself to everybody that might not know you?

Rich Gallo:
Yeah. Rich Gallow Pure Swim, Los Angeles. This June will be our twenty ninth year in business service, about 240 pools weekly. And thanks for having me.

Greg Villafana:
Yeah. Congratulations. Awesome. Yeah, it is awesome.

Dustin Anderson:
And I'm Dustin Anderson. Precision Aquatics Pool Service and Repair out of San Diego, North San Diego County Vista. We're a commercial focused service and repair company and we service about of maybe close to 100 commercials. We still have some residential, maybe about 150 residential. And we've been in business since 2008.

Greg Villafana:
Very good, when you heard 30 years from Rich, did you decide to use the date instead of how many years?

Dustin Anderson:
Yes, that's like it's just June 1981 gotta get my calculator out.

Javier Payan:
Javier Payan of Payan Pool Service out of San Diego County here. I've been in business since 1987, so 34, 35 years. Someone there, we service about 600 pools a week right now and most of them are residential. But we still have a good handful pro about 50 commercial properties that we deal with.

Greg Villafana:
That's incredible. Thank you, guys. Appreciate you.

Tyler Rasmussen:
Yeah. You guys all been here before and been awesome episode. So we're excited to spend time with you all again and get more like a topically episode with you. You got to be so serious. Either you kind of just flip the switch.

Tyler Rasmussen:
Sorry. Well, listen up. I talked to say, oh, you're talking to me.

Greg Villafana:
So we want to start off by, you know, defining what an independent contractor is. How have independent contractors typically been used in our industry?

Dustin Anderson:
I mean, from my perspective, I mean, independent contractors are there's a still a lot of them and there's a right way and a wrong way to use them. But I think what we're talking about mostly today is on the pool service side. I think we see that this industry has utilized the ten ninety nine or independent contractor as a way to essentially employees, but they are calling them independent contractors. So, you know, I think everybody can speak for themselves, their experiences to what they see out there. But I think what we're seeing is a lot of companies that service more pools than they can handle, the main person can handle. So they use somebody as a 1099 to take care of swimming pools. Whether or not this repair service doesn't really matter. But that's what we see.

Javier Payan:
Yeah. Yeah. Before we get started, I wanted to had this little quote I brought up by a guy named Arthur Godfrey. He said that I'm proud to pay tax in the United States. The only thing is I'd be just as proud paying half the money. So I just want to kind of set that tone, because I know we're talking about employment law and 1099s and how to best run your businesses. And I'm not a big fan of paying taxes, but you have to. That's just what makes the paves the roads and, you know, kids keeps kids in school and stuff. So I just want to kind of throw that out there, because I know we've always hired people as W2s and it can be controversial. But for the sake of this podcast, I just wanna throw that out. But on the 1099 stuff are independent contracts.

Javier Payan:
I look at it in terms of different industries. So an independent contractor in general means that somebody that is a freelancer that works for themselves, that is like a hired gun, like a in a hairdresser situation or pool situation or whatever the industry is. It's when done right, then there's a right way to do it, you know. But I think that the pitfall in the pool industry is it's not it's not focus on doing the right thing. It's mainly a convenience thing.

Greg Villafana:
That's how I see it. Right now, we're talking a little bit before, you know, we hit live and recorded. Have any of you ever had independent contractors? I mean, from the very, very beginning that maybe transitioned into employees because know that it's pretty difficult. And when you start a company or you start a business that comes with a lot of responsibility and you got to choose, maybe you're not up for the challenge at this point in time and you should go work for somebody. And there's nothing wrong with that. You know, this is a great business to go work for somebody. You can still make a lot of money and they take care of all your taxes and all that stuff for you. Did any of you guys have independent contractors and you just were asking the right questions on how to do this more responsibly?

Rich Gallo:
Yeah, when I started out, I definitely use the 1099 model. It was just, you know, the way to do it. It was it was convenient.

Rich Gallo:
It actually made things affordable. And it you know, that whole idea of just having all the taxes and all the payroll and all the, you know, requirements that you need to do.

Rich Gallo:
I mean, I was aware of. But it just seemed like way more than just being the quote unquote, cool guy or a pool business.

Rich Gallo:
I mean, after all, we're in people's backyards taking care of the pools. And this just seemed like a much bigger step. That was outside of what our normal was. It just wasn't feasible. It just wasn't something that was easily to do. It cost money.

Rich Gallo:
And it took more money to do to do it right. I just knew that eventually I'll get there. I'm going to have to get down when I want to get there.

Rich Gallo:
So it's just a matter of deciding when will that, you know, some point be. And then once I decided, you know, it's gonna be at this point, I wanted to really stick to that point and then get over that hump and get on to the next, you know, deal. So that's how I'd utilize that.

Rich Gallo:
Right. And when you probably realized this, this was a different time when it probably there wasn't a lot of information on the Internet or even the E signed documents that you you got to actually go probably to. I don't know, a courthouse submitted to the newspapers or whatever yet.

Rich Gallo:
Absolutely. This was before the Internet. So that's this is Thomas Guide.

Greg Villafana:
You know, this is, you know, not typewriter stuff, but just saying, yes, still really impressive because we have all the we talk about on the podcast we're doing. We're at the shows. There's the information is everywhere. It's you can't say that you don't know anymore. And there's so much that you can do, like online. Yeah. So thank you for sharing all of that. Yeah. Do you guys have anything else on that?

Dustin Anderson:
Yeah. I mean, I think that for me, the one thing that I remember a lot was me being really involved in the service side of things and still learning the repair side. Of course, I wanted to do everything, but I didn't. Not only didn't have time for but didn't know everything. So I would have guys that would be willing to, you know, people that were mentors to me. And when I needed to do a full equipment set that I wasn't comfortable with, I would ask them to help me. And that was my example of a ten ninety nine. You know, I would pay an individual a certain amount of money agreed upon to help me do this equipment set. And at the end of the year, maybe we did five of them. And he would get a ten ninety nine. And that's just that was normal. This what I thought back then. It wasn't correct. But that's that's what we did. I never had pool service guys really as ten any nine. But I know that like you said, the information is there. It's easy to get. Not a lot of people know a lot about it.

Tyler Rasmussen:
So I think we wanted to all kind of preface to just a little bit that like, you know, we all we all grown up, you know, in the industry learning these different ways from different people that, you know, there's we're not trying to say that there's only one way that everybody has done it. Everybody's kind of learned their own way, you know, by talking to other pool guys and learning, you know, hey, this is how you do it. And you just hear that you're supposed to hire this guy at night and you just do it. And it's kind of like a we just really want to help educate people on what kind of the right way is supposed to be and help people get there. If they're not or, you know, we've all and most of businesses in this industry have had to use that in a way to grow. Right. And that's what you've we've done. So we all just kind of realize now. And now what? The eighty five you talk about later, you know, it's kind of being hands being forced a little bit to go this direction. So each one I kind of hope figure out maybe where each company is at. So if you're listening, you know, figure out where you're fitting into this whole conversation and what you may or may need to do to kind of get to somewhere else.

Dustin Anderson:
You know, that's just start you know, it's this is our story. You know, we all have three probably completely different stories. I'm definitely not an expert in this field, but my more than have always been an open book. I've just shared my experience and my story as to how we've come to where we are today, which we're still learning. I'm sure, you know, an expert broke down my books. Everything is not perfect, but we're doing our best to comply with everything that we understand. As you know, California state law running proper business. So, yeah, that's you know, thanks for saying that because it's by no means I'm not an expert in this field, but this is our story. And we hope that at least we can educate some people because really when I was starting out, there was nothing like this. Nobody would take the time to explain the business side. You could get someone to teach you how to put a pump in. But the business side is a real tough, tough thing for this business. You know, a lot of us are you know, I would say all or most of us are not formally trained in the business side. So all the help we can get is is, I think, really beneficial for our industry. Right.

Greg Villafana:
And, you know, when we had our company brothers pool service, we felt it at a certain point where it's like we're never going to.

Greg Villafana:
We didn't know you guys yet, but we are never gonna grow bigger than we were in being a big responsible company like you guys have. And I think a lot of people need to understand that, too, that when you're not doing things right, you can only go so far because you're not going to be able to sleep at night and you're gonna be looking over your shoulder like she's not supposed to do that or I'm not supposed to do that or it's like that's that's no way to live. Why not set up these goals to where you can wake up every day feeling great that your team is taking? Yeah, if somebody gets hurt, they can go doctor visit. We have insurance that's gonna take care of it. You know, we've got company vehicles. Everything's in place. So everybody's taken care of with talking to you guys. We think that you've guys got it really dialed in. So, you know, we always look back at when we have brothers and it was you get to a point, we're just like the way we're doing things. We really need to change them no matter what kind of advice we've gotten. We need to throw that out the window and go in another direction, because when you have a business, there's nobody there to take care of it for you. It's your job to go out and figure everything out.

Tyler Rasmussen:
So you just want to kind of just just talk about 8:50 for a second. A little bit more. So if you're doing it the right way, you know, and let's just say there are another California law. We'll talk about later changes a little bit, but they should. If you are hiring somebody, they should have their own license and have their own insurance so that they're protected and probably even paying workman's comp on themselves and doing it the correct way. That's when a ten any nine like legally is somebody who has their own business. Now we'll get into like how you use it, but find that, you know, is kind of what the proper way of a ten eighty nine is. You know, you're supposed to have their own insurance, their own everything, and then they're their own business, you know, coordinate between different businesses. But somebody that you hire that doesn't have any of that is not technically a proper tenant, you know.

Greg Villafana:
Can you supply company vehicle to independent contractor?

Dustin Anderson:
Good question. I don't know. And I don't know if you would. I don't know if I'd be a smart decision to do it.

Dustin Anderson:
I guess maybe if you're like in an effort to try to keep somebody on the road working. But I think as we dive into figuring out what it actually specifically in our business, because a lot of the stuff we read that's come out about independent contractors, it's real nice to read and it is pretty simple to understand.

Dustin Anderson:
But as it pertains to the swimming pool industry, it's very easy to there's just so few scenarios that a ten ninety nine is appropriate for this business. And I think we will have some of that out. I know we talked a little bit about it earlier, so I. Yeah, I've never seen that before.

Javier Payan:
You know what I want to jump in here is when we started our business, the first employer I had was with the first year of doing business. And and he was always a W-2. Now, since then, especially the early days, I would use independent contractors to do filter cleanings or other stuff that I I couldn't do. I also had another guy from my IPSA chapter that we actually split a ten ninety nine guy. And so, you know, I've had some 1099 guys come, come and go kind over the the past for the most part we're all to straight up. That's about it. But getting back to your question about can you supply a vehicle? I think it kind of got a eerie quietness about it. Like I'm saying, A, why would you do that? Because, A, it's like whatever you're doing. Just play by those rules. So if you have an independent contractor, he's an independent contractor. The minute you supply a vehicle, what goes through my mind? Okay. What happens if he gets in an accident? Is it his truck? Is it your truck? Is this is just a really foggy, foggy thing that it went, as you said. Greg, you want to sleep at night. You want to just do whatever set of rules you're playing by play. Stick to those and uphold them and be clean about it.

Greg Villafana:
Yeah. And, you know, this was such a difficult thing for us because we'd always get frustrated that there was a lot of things that we couldn't say to the independent contractors or we would and we would just go back and be like, do we? We shouldn't have said that, you know, these are employees.

Greg Villafana:
And that's when we got to the point where we're just like, you know what, maybe we should think about making the most valuable person on the team at this point, a employee and document that process and seeing how much it costs us and all these different things so that we can set ourselves up for making our service manager an employee and then our office manager and all those different things I call those employees.

Tyler Rasmussen:
Yeah, it was super. I mean, I remember lots of discussions between you and you and I whenever we would go home at the end of the day and then we would get a phone call and the customer's says, Hey, something's wrong, my pool. There is no way that I could call that guy to tell him to come back and go to that pool 0 away. And that was super frustrating as a 1099 person, because, you know, once they're done, they're done or day's over. You can't call him back. You can't tell him this. And then there's a weird line of like, well, did you do the job completely? Because technically, you know, if there's a problem, there's still. He didn't do it. He didn't complete the job that asked him to do. So this is really fine frustration line. It's like, you know, I'm just gonna go clean the pool now because I have to you because I don't know. I don't know how to handle this. And that's the stuff that's very difficult.

Greg Villafana:
You can't control anything. It's like if you want them to be there at 6:00 a.m. and you want them to wear blue, Dickie's in the work shirt and you want them to go through training and do all this like that's stuff that if you've worked for anyone else, any company you work at Pizza Hut or you've worked for a furniture place or anything like that, like those people can do that at Best Buy because they're employees. They can. Tell them, like your shift starts at this time. It's completely different. How do you guys feel about that relationship between the independent contractor and the owner?

Rich Gallo:
Well, the independent contractor and owner, it's exactly what you just said. You know, you just don't have that control. You don't want to overstep boundaries. The laws are putting in play that you can't direct them. You know, you can't have company meetings and things like that. So you lose a lot of control and not a quality control. But then that goes into a whole other area of you trying to build and develop your brand. And then all of a sudden that's, you know, getting a lot of cracks in the armor.

Rich Gallo:
So when you have employees, you know, that's the opposite. You're basically now building that brand, you're building that loyalty, building everything that you want as far as your vision. You have company meetings. You get everybody on the same page, everybody kind of dowson because they're more and they're more vested into being an employee and being part of something rather than, well, I'm just a part of this company and five other companies.

Rich Gallo:
And if this guy gives me an attitude, then, hey, man, you know, there's always some other guy out there looking for you. Don't give me 20, 30 pools. You'll do so. There's nothing really invested. Plus, that guy is an independent guy. He's trying to build his own brand. That guy is actually you're gonna be a competitor, you know, soon. So that whole idea just became something that was clear and more or more reason to get away from.

Greg Villafana:
So what I'm curious, like what is the worst case scenario? Because we talk a lot about that. You shouldn't do it. But. And I think we were talking about something similar to this earlier.

Greg Villafana:
But what can a independent contractor do when it's like, I need you here at this time and I'm telling you what to do? You wear my uniform. You're doing the training. Like what? What can happen? Can he go tell somebody you can like what happened?

Javier Payan:
I think I just heard you violate three labor code.

Javier Payan:
Right. All right. The labor board, you know.

Dustin Anderson:
Well, I mean, you lose you know something? You're talking about building a brand and trying to build a team. You lose a ton of control. But as much as you know, if you're running a business that these guys are 10 99s, truthfully, the guys who are being 10:19, I know as little about the laws as you do. So a lot of these guys are fine with acting like employees. But the issue is, is you are a stepping stone for them ultimately in the long run. You're training your next competitor and as you work hard on that brand and trying to develop a company. I mean it's I think all of us get vouched for. I mean, that's like, you know, we all work hard. But our team is what drives us like is what our reputation is about the people that I sent in the backyard. So everything that I do has to do with trying to support these guys who have made a sacrifice where they are not working for other people. They trust me to steer the ship, but they are the the the really the heart of our business. And so, you know, I'd give anything for the guys that are on my team. But can you do that for a guy that's a 1099. That may very well take your customer list and dip out on yet tomorrow. You know, that's a that's a big that's a lot of trust to put into somebody that you may have not invested as much into. They can burn you. Yes. You know, lots of horror stories out there. But I think if you take this step and you make them employees and you invest that time into them, they truly appreciate it. They understand that it costs us as employers a lot of money to, you know, not only you pay, try to pay them good money, but it costs us a lot of money to employ them. And you hope that they pay that back in quality service and it's that type of thing.

Greg Villafana:
Right. And that's difficult when they're independent contractors because they've probably been nothing but independent contractors. So they expect a lot of different things where it's like, oh, I know, I'm using my truck and I leave for my house when I want to. And it's like, oh.

Greg Villafana:
So that's why that's it's hard for the business.

Javier Payan:
Well, like when you guys were building brothers pool service, I look at it from a whole different perspective. What does your customer think when you go to sign somebody up as a customer? Hey, you okay? It's gonna be X amount per month. Here's what we're gonna do then. The pool tech shows up in your customers mind. Is he an independent contractor? Is he a bona fide employee of brothers pool service? And then, you know, so if you look at it from that standpoint, whatever story you got going on with the relationship with your worker, if its attendant added up to what your customer think. And most customers, I don't think are savvy enough to really understand the difference. But I look at it because crap is happening at our at our place every day. There's something going on. But what happens when there's a work related injury and then there is no insurance? So you've got to kind of look at it from the customer's point of view, what their perspective is when they hire brothers or or precision or or a pure swimmer Pyan pools. What is their impression of the person in the backyard?

Greg Villafana:
Well, you know what? Not to make excuses, but we really didn't have an idea. We're always doing the best that we could in learning what the trade was. And everybody always had a uniform and look the part and probably shouldn't have. But just being totally. Honest. And then when we stumble, you know, across wanting to grow and get bigger and we wanted people to have insurance and be employees. These are things that we get preached, all the things of the industry about equipment and this and that, all these different things. Not once did anybody come knocking on our door or send us an e-mail that said anything about these are the steps you need to take in running a responsible, legitimate pool service and repair company in Scottsdale, Arizona. Like nothing even close. So we should have done our homework, as you guys did. And we got to a point, you know, a few years in where we did and we started, you know, making those jumps and they were difficult and they were very costly.

Greg Villafana:
But we did sleep a lot better at night. And, you know, that's what this is all about. It's like it's never too late. Yeah. You might not be able to flip the whole company right away, but it's I know that this is a problem and going to start, you know, surely but slowly making these things happen, because I don't think a lot of people get to your guys's level if they don't, correct?

Rich Gallo:
Yeah, absolutely.

Javier Payan:
Well, yeah. And as a company, you're you're vulnerable to the weakest link. I mean, we talked about earlier about different injuries that our staff has had or we've had personally. And if you look at it like, you know, like dog bites, Rich said he he got bit by dog pretty severely on his Achilles heel, I think.

Javier Payan:
And, you know, his gangster manager totally got walked to the hospital from there so it can become a story.

Javier Payan:
But, you know, if if Rich's at work in, as you know, Rich's pool service, he gets a bit by a dog. Really? Who cares? You know, nobody cares. No one's coming after him. Now, if Rich's employee or 1099 guy gets bit in the backyard, it's a whole different ballgame, a whole different set of circumstances.

Tyler Rasmussen:
So what would happen? Yeah, in that scenario.

Javier Payan:
So injury happens, you know, dog bite, papercuts, whatever the cases, they're going to get some medical attention the minute they go to the urgent care or the emergency room, you know, they're going to ask what happen? And so you're gonna say, wow, I was at work working for Rich and I got bit by dog. And so you're at work. OK. Then they're gonna call rich and go and get a work comp policy. The problem is, again, one of things I said earlier, there's a right way to do 1099 stuff. And the laws have always been a little murky. I think with this AB5, they're adding more definition, which tightens things. In this case, guys, in the emergency room, they're gonna ask him what happened now. If he's a 1099 and he's working out of his own truck and he's getting ten bucks a pool or whatever he's getting, he may or may not have health insurance. So if he has health and if he has health insurance and, you know, everyone's cooled, it's not severe, no big deal. But if he doesn't and it's he's gonna be looking at getting the medical bills, he is going to really quickly flip on, which say, no, I work for Rich in the state of California. I'm sure it's this way in a lot of other states, the labor board is always going to side with the employee. That's just always gonna be that way. And so the now rich gets a phone call, the guy's leg gets fixed. So he's all good. That's a that's a good story there. But then now Rich has to explain why he had a person on it working for him that wasn't covered under his work comp policy. And he's gonna say, well, the guy's a 1099 and they're going to ask him. And all the guy has to say, no, I'm not.

Greg Villafana:
You know, and then it's Richard just asking for like an immediate audit on your business. It's like you've been in business for ten, fifteen years. Why? Yeah. Why is this guy. And he's been working you for five years and he's still an independent contractor. Like slowly, it's just unraveling and it's like there's a lot of pain.

Tyler Rasmussen:
Censor's, your question about like the worst case scenario is that like going to labor board and them saying their employee because then like we talked about earlier, you get if they figure out and they confirm that that dude is an employee, then they're going all the way back to the beginning of that employment. And you're paying payroll taxes on everything and you're paying workman's comp on everything. That's like the worst case scenario.

Dustin Anderson:
I'm going to the labor board my word and saying I'm an employee, especially if you're running a company that has seven, eight, 1099. You know, you've got a thousand pools under your belt and you are. Because, I mean, we we all know these companies. We compete against them all the time and that this is the problem. You know, we'll get into talking about. But it's like leveling the playing field. We are not doing the same job. You know, we we yes, we are both quoting pool service and talking about doing pool service. But your cost of doing business is completely different than our cost of doing business, because you have all of these guys you call employees and they may have really nice uniforms and maybe even they have the cool decals on their truck. Maybe the personal trucks. But I paid for the decals, whatever. It doesn't matter how you look from the outside, it's the paperwork that matters. And yeah, it takes something as little as a dog bite or something that can be completely out of control like a car accident. I mean, car accidents in this business are a big deal. There's hazmat involved. We have chemicals in our truck that when they mix, it creates big problems. And it may have nothing to do with how careful this person was. And they may not be a bad person that's trying to get after you as a business owner. But stuff happens. And there are questions you will have to answer as the owner of the company and they are going to be expensive.

Greg Villafana:
Yeah, we've had we've had some really good talks, Dustin, because, you know, you've expressed, you know, how you feel about, you know, Yelp and different things like that.

Greg Villafana:
And, you know, I I took a lot of time in thinking about a lot of that.

Dustin Anderson:
And I think you're totally right that it's not an even playing field, whereas there's a company that's just independent contractors and you're competing with them and they're getting some of the best jobs from maybe Yelp or something like that, because they're very aggressive in getting the reviews and doing all that, where you're taking the time and being aggressive and making sure that you have all the right documentation and contracts and all these different things. It's really difficult to be playing against, you know, another team that isn't necessarily playing by the rules.

Dustin Anderson:
It has to. And you know, what I struggle with is, you know, I don't I don't want to be a bitter person or be it I'm not I don't have a lot of enemies in this business or anything like that. But it is it's hurtful, really, based on the amount of work that we all put into this and how hard we work to not only find good people to work for us, but keep good people working for us to watch jobs that we are good fits for us, that we probably should win and we don't win as a result of just money, you know, and it's like money. That's the biggest thing, though.

Greg Villafana:
I think if you're hiring and you're trying to find the best candidate for this job. I don't think that the best candidate is going to want to be an independent contractor. No. Well, I think you're right. You're gonna get the person that's gonna bust their ass and they're gonna be here every day. Yeah. Like they don't mess around. They're there at this time every day. They want to learn. They want to do training. They have no problem working weekends. They're a team player. I think that's an employee. I think that person wants to get paid and move up the ranks. And they want insurance benefits, a truck. They want all those things. And I'm sure you guys have been a very attractive business to, you know, some of the best technicians that, you know, are out there in your city.

Tyler Rasmussen:
Yeah, I think I told you the other day on the phone, like we are a repair tech tech that we hired for that we absolutely had to have like when he came in, when we were talking about 1099 and he was like an absolutely no way ever signing with you as a 1099 housing authority. I spent the last 10 years paying taxes on some some issue where I worked in 1099. I'm never, ever do that again.

Javier Payan:
Should get him on those phone calls. Yeah, right. But that just proves my point. Like, yes.

Dustin Anderson:
That's a great experience and a great story because, you know, even I you know, I had I worked for a couple companies before I started my own. And I think that's my that's probably why I never had the 1099 issue, because I was the 1099 issue. I was an employee. I ran the service department. I ran the retail side of this company. I I was a company guy. I was an employee. But when I got my first 10 '99 and owed Uncle Sam $10,000 and I had $0, that's an experience you don't ever forget. I paid that off for years to that to the government. Once I was squared up, I will never do that again. It was a you know, and the person who, you know, was employing me at that time, no help. You know, he wasn't willing to. I was a kid, you know, that was 20 years old, you know, and he was just not willing to the whole problem.

Tyler Rasmussen:
You know, when you're hiring these, they don't they don't know any difference. They are an employee and they have no idea that they're supposed to hold that money for taxes, even if you tell them they don't what that means.

Rich Gallo:
Yeah. Yeah. But they also know the difference. So when you leave the water on. Yeah. Yeah.

Rich Gallo:
And like hey here's your check for a thousand minus 400 because Mrs. Smith's water bills me. There's another side that you're not doing it to the employees.

Rich Gallo:
Yeah. Right. Yeah. I wrote quick. That's. Yeah. It's not gonna happen. So you let the water on.

Rich Gallo:
I could pay to 400. All right. So don't do that again. If as an employee. But 1099 you're taxing them, right.

Javier Payan:
So what we'll Tyler you bring a good point about attracting employees because right now in this in this economy it is really difficult getting people, let alone good people. So just a pick on Dustin for a second, who we both are running ads for, for an employee. And my ad says, hey, you know, you get a company truck is your wages, your Monday through Friday the and company phone. And we offer this and that and we list our stuff. And Dustin's ad reads, Hey, looking for a pool tech must have his own truck, must have his own insurance and basically responsible. All your stuff's like what new person coming in the industry is going to find that attracts like. If you think about a young kid, he's got a brand new truck. Let's say it's like I'm going to beat my truck up, really like, you know, so if you look at it from that standpoint, there's a lot of benefits to just doing things the right way because you're attracting the best of the best the best technicians and. And again, there's a cost to it. But, you know, if you look at it from that standpoint, you know, what person would want to gravitate towards Dustin's deal?

Dustin Anderson:
Can I say who cares? I want to I just want to highlight that there are a lot of people who are attracted to it.

Dustin Anderson:
And this is absolutely to me. This is not what I you know, if I was out there, I would want your job. The guys that want the other job are the guys whose typically significant other has a great. They're usually a dual income house.

Dustin Anderson:
So maybe wife has a job with great health benefits. All they're looking to do is to bring home a sizable amount of cash that they can contribute to the household bills and the other goes under the mattress. These people have their whole life is financed on their wife's name.

Dustin Anderson:
There are a lot of them and a lot of them are a little bit of not, you know, maybe been in the industry for a long time. And it's like I mean, I've had so many job interviews with it's like, hey, madeleines, I make 200 bucks a day. We're good, you know? And it's like I'm looking for a company person, somebody that wants to be here for the long haul. But there are a ton of guys and I really feel strongly about trying to. It's not my job as an employer to like coach up a person about, hey, this is what's best for your life. But if you don't have a bank account that you can put a check in that you get paid. If a pay stub means nothing to you, you're willing to take an envelope full of cash. Like, I don't know every time I see you or something like that. Like that's not good for our industry, for our state, for the economy. It's just it's a bad deal overall. And so people who are paying guys like that are maybe it's good for their business because, you know, owners tuck it in their pocket a lot more money than I am, but it's just a bad deal. And a fortunately when I run ads for guys, I get a good mix of inexperienced guys, which we like because we can kind of, you know, let them know what we're offering for a full time job. We're looking for somebody who is going to stick with us for a long time. And then I get a lot of calls from guys that are, hey, I've been doing this for 20 years, you know. I know that gig, man. How how much purple and how much cash can I put my pocket and the paperwork in that employee handbook and all that, it's something that they're not interested in. And truthfully, that's what's wrong with our business, right?

Tyler Rasmussen:
Well, said, I think, too, you want to touch you want to show me like, you know, maybe you buy a house and stuff we taught you.

Tyler Rasmussen:
Oh, yeah. That that's always a big piece of it. Yeah. I just that's just for my perspective.

Dustin Anderson:
Just because I've had I had the experience with it before, like, you know, you talk about going to I just explain, especially when they're younger folks that are just getting into the workforce, it's like you'll never be able to fill out a loan application to have a vehicle or a home finance to you if you are a cash 1099 guy, because truthfully and it's just my opinion.

Dustin Anderson:
Like I said, I don't know everybody's business, but if you're making 50 grand a year on a ten ninety nine, chances are you have a whole stack of write offs that are not legal.

Dustin Anderson:
And you are telling the government that you made about five hundred dollars that year and you're putting the rest of the money away. You're cheating the government. And it's none of my business, but it is going to bite you. One day when you want to buy something. And as a normal adult that wants to have a life and a family and stuff like that, you need bank to loan you money sometimes and without a proper paycheck and, you know, proper taxes paid and all that. It's not what it used to be. You have to have that in line for somebody to loan you a significant amount of money. So I just try to tell them, you know, unless you're some, you know, trust fund person that has a ton of money that you don't need. This is just a, you know, a gig or whatever. I just think it's very beneficial to look at the long run. Even if you don't want to be with my company for longer than a few years, it maybe it is a stepping stone and you're just being honest about that. Make it legitimate. Get a paycheck and you know that.

Javier Payan:
Don't be a 1099 and take it another step further. It's like part of those payroll taxes go to people's Social Security and their disability and their unemployment. So if they ever find themselves without a job and you've always had a job where you've had paid paystubs and you go to file unemployment, you know you're entitled to that.

Javier Payan:
That's what you've been paying into. But when you show up to the unemployment office and you can't show proof that you've even existed, then you're not going to get those benefits you're entitled to. You know, right now, this coronavirus, things going on like this is just hot out like by the time this comes out. The prison just announced made a big announcement last night and governor of California made a big announcement today. David told people not to congregate. And so I start thinking about, okay, look at all these people that work for restaurants and the convention center and all these it when they are told there's no work for six months. What are they going to do? You know, they're gonna go right, the unemployment office. And if they can document that they've been employed and been paying into the system, then they're entitled to that and weep as employers also contribute to that. And yes, they are entitled. If someone shuts my business down because of, you know, all this stuff going on, all my guys, I can look up to go get unemployment go right now.

Dustin Anderson:
They deserve it's their money. They paid it. You know, they may not see that money. They didn't write the check, but it came out of their check. They deserve that money, right?

Tyler Rasmussen:
Yeah, for sure.

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Tyler Rasmussen:
So let's let's start with the A5 Law just for a little bit. I know there's been a lot of discussion about it and it can go very deep down a bunch of rabbit holes. And I want to do that, but I want to touch on it so we can kind of see what kind of has changed. Also, you know what? I want to make sure that everybody understands what we're trying to keep this like as positive as possible. You know, we really want to try to help people understand what a 1099 isn't and how to fix that if you want to. So we're not trying to scare people away from this idea. It's really more about let's let's see where you're at and see what you want to do moving forward. So let's just jump into that real quick and talk about why it came in place, which you just talk about dynamics of it and how it's, you know, gone in to this eighty five law.

Rich Gallo:
Yeah. So Dynamex came out April of 2018 and it was basically a trucking company that had some issues with their truck drivers and converting them into employees, an independent contractor and all that stuff.

Rich Gallo:
So that was a big, you know, warning shot to us as a company. And I think to us as an industry as well. Just recently this year, 2020, January 1st, our state, California, implemented that as law.

Rich Gallo:
And then they took the dynamics, which is a Dynamex. It's a company and it's a case. They now converted that to AB 5 and then they made ABC rule. So they really narrowed it down to basically try to give us a real clear, concise idea of what an independent contractor is and what an employee is. And they've done a pretty good job. So in our industry, we do pool service.

Rich Gallo:
So, you know, of A, B, C, the middle part B is really one sentence and it's really easily defined. If you just put it in the word pool and pool service in that, it just simply says if you're a pool service company and you hire people to do pool service, then that person is an employee. Simple.

Rich Gallo:
And all of A, B and C have to be met. So if you can't meet one of them, that A don't matter.

Rich Gallo:
So be the middle of it is really as simple as saying. So pretty much anybody listening right now is probably in our industry and does form pool service. So you if you hire somebody, do that. The state of California is let you know that that that person's an employee if you're not in the state of California. Congratulations.

Rich Gallo:
But it will also be just a matter of a year, two or three, most likely before you will all be Californians, no matter what state you do business in. And it will be most likely a federal law, if you ask different people, get different opinions on if that's going to happen or not.

Rich Gallo:
But, you know, our state has multiple issues that are kind of know at surface and under the surface with, you know, budgeting and everything else. And one of them is homelessness and they can't figure it out. Small businesses have always been that that source of revenue in taxes. And I think that they really want to make that known that we're going to now address this big issue. It's a social issue. It's something that everybody in California deals with and sees on a daily basis. So if the homeless problem is still here, which it is, and that's not going away, this isn't going away. And it's affecting a lot of industries, not just the pool industry. There's a lot of talk about exemptions if you qualify for that.

Rich Gallo:
There is a very lengthy 70 plus questionnaire that a._d._d puts out to see if you will meet those qualifications to become exempt. Most people won't buy it. So it's kind of doom and gloom, but it's one of these things that it just it is what it is.

Rich Gallo:
And it's part of our life. It's part of, you know, the state we live in and it's part of what we need to do as far as being in business. And, you know, ultimately what that's going to do is it's going to increase costs. And in my business, my personal business and our business model, if we have increased costs, we're going to have to increase revenue and we're going to do that either by working more or we're going to be increasing our pricing. So it's just an adjustment and we figure that out and everybody else is gonna have to figure it out as well. And I think ultimately what that's going to do, it's going to be a leveling playing field eventually. And I think that's going to make more people work together. And, you know, we've talked about other industries. You know, you guys have been real big opponents of the HVAC industry. And, you know, the models that they've adapted, adopted for the game, just how they bid and what they charge and how they run stuff and the image of it and the pool service industry mainly, you know, becoming more like that, which I definitely agree. You know, it's like you ask any homeowner, you know, you ask them, say, if your air conditioning doesn't work and you call anybody, you know, what do you expect to pay? You know what you expect to pay just to have somebody come out. And usually it's 150 to 200. So and that's what I would expect. You know, something's not working. Just come out and look at it. Let's get it working. So but when you know, we have to go and look at a pump or heaters like that, it's like, well, why would you charge him for that? I mean, isn't that free? I mean, don't you do free estimates? So there's a disconnect between the homeowners perceived value, a lack of perceived value for what we do. And again, that's really kind of on us.

Rich Gallo:
You know, we've created that over decades of, you know, pinning each other against each other, low balling each other and really not innovating.

Rich Gallo:
You know, you get a homeowner. It takes three of us.

Rich Gallo:
And if we're asking, well, Javier prices this and dozens prices this, well, you know, I'll do it for less homeowners like, wow, this is incredible. Let me let me let me think about that. Go back to these two guys and say, well, hey, you know, Rich overhears often at. Well, you know what? Let me I can do a better, you know, which means I can do it cheaper. So I guess I've been in this for twenty nine years, almost three decades.

Rich Gallo:
And that's never not been the it's that's almost been the standard. So I just that's a huge, huge thing in of itself. I also believe that because of that, that's why we are. So it's like a raw nerve for us. This this A, B, five, it's just like, wow, this really, really sucks. This really is like going to be a game changer. I'm going to go out of business. You know, I can't afford this anymore. You know, it's because something hasn't happened all these these years. And, you know, and this is really this this podcast is really to just the big thing. If we could all agree here to help everybody listening is, hey, listen, you have five guys here at the table.

Rich Gallo:
And each one of us, it seems like, has had experience in having the 1099 guys go into a W2 guy or understanding that. And what we'd really want to do is really, really emphasise the help that's available to say, hey, we know where you're at. We've been there. And even if we haven't been exactly where you're at. Hey, hang in there. It's a great industry. We all love it. We know you love it and we can help you out. And then that's the main thing is to say, listen, you know, the positive takeaway all says is that there's something here. There's some light at the end of the tunnel. You know, you can do it. And, you know, for dishonest, there's going to be really a for sure way of doing it. So thing that I guess we can't say. No one does say. But you're going have the race pricing. That's just what's it's going to come down to it. It's not going to happen anyway if you are raising your costs. And those numbers are 30 plus percent per whatever per guy. And how are you going to look at it? You have to. You have to you have to make that adjustment is I don't know why we can't talk about that, but it is what it is. So. And it's time.

Rich Gallo:
I mean, is long overdue.

Rich Gallo:
And it is something that has needed to have happened many, many, many years. And this is where we're at.

Greg Villafana:
Right. And I think that's that's very well said. You know, you don't want to be the the last one on the bus. You know, this is a really strong warning about and don't be naive. The distribution centers, we were talking about this last night that they can't now nobody cares. Don't be naive to think that people care that much about your business, like the state of California. If you walk into distribution and they're like, oh, we need this new certificate that says that you have this many employees and then like what? I'm not saying that that is a thing or it's even going to happen. But don't think that you can't wake up one day and the landscape has totally changed. And where do you want to be when that happens? Because when you're like, I didn't know. Or that at at a like like, oh, that's that's too bad.

Rich Gallo:
It's never worked for anybody.

Greg Villafana:
I didn't know.

Greg Villafana:
It's not a good when you're doing 20, 30 miles an hour over and you've been drinking and all that and a cop pulls you over and you say, I didn't know I couldn't do that. Oh, that's nice. Well, you're about to figure it out.

Javier Payan:
Expensive lies only Jim bracelets. Yeah. Exactly.

Dustin Anderson:
And does it. It doesn't have to be such a you know, I just from a perspective of the. Because it is it's still you know, it's kind of doom and gloom.

Dustin Anderson:
It's kind of negative. Everybody's worried about this. How it's gonna affect my business will say California's not asking you this is this is the law. You have to do it. If you don't do it, there are penalties that you may have to pay. I'm not saying there are a lot of pool police out there that are going to bust you. But somebody will be made an example of I'm sure it's already happened plenty of times. But the positive way to think about it is we all have to do it. So everybody should just jump on board. And like you said, it's long overdue. We deserve more money. We need to stop being pool boys and become pool professionals, pool operators. And we deserve more money and we deserve to be able to charge more to offset that overall. You know, it's a lot more money. You're right. I mean, 30 percent is not far off, I think. I mean, it's obviously a little different based on every different company. But I mean, it is going to cost us more to do business. Therefore, we will be charging more to do business and we should. He held to a higher standard so it could be a positive thing for everybody, but it takes all of us or a majority of this business that is on the other side to start shifting over. And, you know, there are tons of resources and I think all three of us have always you know, I'm an open book.

Dustin Anderson:
You can call me. I don't care if we've never met before. I'm glad to have a conversation with you any time about whatever I know. If I can give you any information that helps you in any way, I would love to give it to you, because not only it's a nice thing to do, but if you come correct, it helps all of our businesses so well.

Javier Payan:
If you think about it, you know, like when AB5 came out, there's a lot of people crap in their pants. But I don't think any one of us here were crap in our past. Yeah, we've been doing this the whole time. Like it doesn't really change how we do business. We're just it's just another day at the office. But what's cool about it is that the benefits of it again, trying to be positive here is that if it does raise the level, the industry and mainly with pricing, because we've all been undercut severely by competitors and which is why sometimes we may tend to have a chip on our shoulder about this, because men were we know what it takes to run our business and we try to price ourselves accordingly. But the market is constantly dragging you down. And so we've always maintained that struggle and we've always fought that fight. But now maybe five comes out. Well, like I said, it doesn't affect us. But the cool part from our perspective is now affects everybody else. Now the playing field has the level. And when it does that, then now we're in a fair competitive environment. And then that way, if we lose a bit, hey, the guy was better than I was. That was that was it.

Greg Villafana:
It's not like I got undercut 40 percent, but everybody is gonna raise their prices once you go through and you make your team employees you see right away like, dude, 120 is not cutting it. Yeah, we need to raise our prices. And then it's like the the playing field really is level because now you're starting to see that I have to treat my team a certain way. I have to have office, whereas I'm going out on retreats. I'm taken this whole entire team to Long Beach to go through all these classes. I'm putting them up in hotels. That's not cheap. Your customers are the ones paying for that stuff. And the way that you're going to be able to relay that message to how much you know your services cost is, you're thinking about all the things that make this business, what it is and how it's running. And yeah, you're gonna come in much higher. And you're totally right. We deserve a lot more money than we're being paid right now because the responsibility is extremely high and being a pool service company.

Tyler Rasmussen:
And I think to your point about like that, the customers don't understand this whole. That's the big piece of it is to start educating the customers. We talked about all the time, but like when you start to raise your prices, explaining that to the customer, why you're doing that and why this industry is getting better and explaining to them we have to do this increase, but doing it correctly and educating the customer on why that's happening, because people are going to backyard, do a bed, throw price out. They don't understand what this is. That's why I look at us like that. Oh, you can come into a have in two seconds. Yeah. Yeah. You know, one 120 go. We're done. Like that's the part that's hard because none of that is getting explained to them. So that's their only experience maybe with a pool person is they came in. We're here for two minutes, told me one twenty and that's it.

Greg Villafana:
And don't think they're stupid. I mean people that own pools are upper middle class. Upper class. They probably own businesses or they work for a big company. Believe me, if you own a pool for the most part, there's not too many things that you're going to say to them that they don't understand. If they were what we just talked about, like know my whole my team of 10, they're all employees and we've got to pay for uniforms.

Greg Villafana:
They get washed and they get no uniforms every week, like all these different things that go into. I'm not saying you have to break it down in being that detailed, but even down to the insurance and all the training that they have to go through, like I get it, I work, I'm a higher up at Sprouts or Best Buy or whatever it's like. I totally understand all of that. But if you don't have any of that, you don't have much of a leg to stand on.

Tyler Rasmussen:
And that's your piece, right? Right. You you start it all goes back to the quality.

Rich Gallo:
I mean, are you going to deliver that quality? And if you're going to deliver that quality, you better have everything behind it back in that. And you can't fake that.

Rich Gallo:
That will come out if you're not of quality. That will come out if you're of quality, that will also come out and people can sniff that out.

Rich Gallo:
So it's an amazing thing. They can sniff it out. So when you present that upfront with everything you do for what you charge is basically I've had people tell me, you know, way back when when they wouldn't do things right or do things differently like everybody else, people would say, you know what? I'll get back to you. Let's say, you know, you know. Yeah, I'll think about it. If people don't take what I have to offer now, they'll say I can't afford that. And that's something psychologically that none of us ever want to say, I can't afford it. You know, what we always say is I'll think about it. You take that test drive for that. You know, Mercedes, cause it feels good. And I knew I'll think about it. But when you when you when you show quality and it's to be respected. Well respected back and say, you know what? I just can't afford it. You know, maybe there's a way to make them afford. But if they can't, I can't. So, you know, if I'm going out on a bed, you know, I love it when people say yes, but are people going to say no? I want to know. Faster than yes. Because times money and my time's valuable. Their time's valuable. And I want to get in and get out. Like anybody else.

Rich Gallo:
But on a no, I don't want to call them back 16 times and drive by their neighborhood, knock on their door, you know, send them an email. And, hey, man, I'm still thinking about you and this man. Now, if we're not, we're not. And if we are, we are. Let's do it.

Rich Gallo:
But in that quality, all those different caveats, they all go part of that.

Rich Gallo:
They're all hand in hand with that and having all these different layers of protection and positioning yourself and having the leverage and having the leverage on your side for once and not being leveraged by the homeowner or not being leveraged by the guy who's doing the work for you. You know, it's all part of that. At the end of the day, when when you come home and you're at your home and you have everything lined up and you're doing your damnedest and it's your best. There's something about that when you have all these different worries and they're all coming at you from any angle and then life just happens. I mean, we all have, you know, these tremendous stories. But, you know, the biggest, you know, fears of somebody owning a business that has people working for him is an auto accident, dog bite and let you electrocucion, you know, falling in a pool.

Rich Gallo:
I mean, all these things those things happen when they do. If you're covered, it's like, OK, it happened. Now I know what to do. I know the system. I know the policy. I I to go through that instead of going around it, under it or over it. You shouldn't go through it because on the other side, when I get on his side, I'm back to back to square one. I'm back to business. But you have to have those protections. You have to have your business. You know, you have to be leveraged.

Javier Payan:
One of the things we've always done in the last 10 years or so as we developed this checklist. So when we'd go on a on a bid to do a new pool service, the first thing we have to do, because we know now we're not the highest guys in town. And I know that. But we're also not going to be the cheapest. In order for us to employ quality people, we have to pay them. And that's just all there is to it. That's just simple math when we go in to a bid situation. I've always felt the first thing I got to do is separate myself from the mental model of what people think a pool guy is with the guy and the flip flops and that type of stuff. And so we have a checklist that says, you know, our guys are employees. We have a contractor's license. We've been in business since 1987. And we go down. We tell them at the end, hey, look, if you can find somebody that you like better or has less money. As long as you know they're on par, then you're getting a great deal. But if they can't check off that they have a license or that they've been around for any length of time or they're part of a, you know, IPSSA or UPA or some trade association or Better Business Bureau that they can't box for box match what we have, then you're private.

Javier Payan:
I get in the deal you think you're getting, you're because you have to give something up. Well, if the guy doesn't have a license, his costs are different. You know, he does not pay that fee every couple years and maintain a bond and all that. So he can lowers price. He doesn't pay workman's comp on his guy. So his prices, his costs are lower. So they're back to the consumer who's you know, we're assuming as intelligent. If they got a pool, they're most likely have some level of success and intelligence from now. You've painted doubt in their mind. So the one the next guy comes along and he's he's, you know, 100 bucks and we're 130 or whatever. Then now you've got doubt. What does that actually 30 bucks given me or 40 or whatever the case can offer something that just in this.

Dustin Anderson:
It's almost off subject. But I think that it's valuable to say there is absolutely nothing wrong with being a sole proprietor, independent pool person. You do not have to have employees to make a good living in this business. In fact, some of some people that I know, people that are close friends with me, operate as independent operators. Fifty is extremely quality pools. They do a killer job and they eliminate a lot of this conversation. I get it. This is heavy. It's a it's it's not for everyone. You may not be interested in the slightest to get involved in any of this. That's OK. Sell the extra pools that you don't, you know, contact a broker, get rid of those pools, get rid of the ten, any nines, keep the best ones for yourself and run a killer business and be a part of a killer industry. This is a great industry to be in. And there's plenty of room for independent operators. Being an employer is not for any everybody. In fact, it's probably not for most. And I think we can all tell stories all day long about stuff that having employees has been taking years off my life. And, you know, there's so much stress involved in it and it is not fun every day. There are a lot of great things about it, too. But if you're listening to this or you're reading up on AB5 and you're thinking this is just B.S., I am not going to do this. Consider just being an independent pool person. There's nothing wrong with that. There's no shame that doesn't make you, you know, not as good as us. Three or the other guys run a big businesses. In fact, it might make you better. Yes, I know some guys that make a whole heck of a lot more money than I do with one truck, one guy, they depend on themselves. They don't have to deal with all of this. I just want to make sure that everybody knows that it's perfectly fine in this business and those we are not talking to you.

Dustin Anderson:
If that is you out there doing that, good for you. Keep doing what you're doing. You're not in our way. We want you to obviously charge the right amount and do quality work for our industry. But you're not the problem. And in fact, I think a lot of people maybe that are struggling with this, that have these 1099s and if they feel like, hey, I want to sleep better at night, but I'm not interested in getting involved in the business side of this. It's a solid option to consider. You know, this pulls still bring a lot of money to sell them and add to that.

Javier Payan:
You know, instead of California, you do not need a contractor's license to clean pools. And I think the threshold would still 500 bucks is up. The threshold still. Yeah, it's a six hundred now. You can do a job under 600 bucks. No license, no problem. But the minute you hire a guy or the minute you are doing jobs that are over six hundred buck, then the rules change. So, you know, and and again, I know a lot of pool service guys are great people. They run great businesses, are living great lives and they do their own thing. And, you know, a lot of times people ask how I'm thinking of hiring my first employee, think, oh, why would you want to do that? You're in the bubble right now, man. You're a high profit margin zone. You know, why do you want to add more headaches and to your life, you know? So, yeah. I'll definitely be the first to jump on that. There is. This is a great business and you can make a great living just as an independent guy.

Greg Villafana:
But at least that allows you to if you someday want employees, that allows you to have a little bit more time to figure it out. You know, if you sold off some of those pools and you're doing it by yourself and maybe you aspire to have a company one day that's got more employees. At least you're doing things responsibly and you're taking the time to earn a little extra money so that when you hire maybe an office manager or a repair person, that you're able to do it the right way.

Dustin Anderson:
I think that yeah, that's really pay, you know, take that money and pay off some of the debt that you built up building the business. I mean, that's just what we do. We build up debt when we're trying to build this business, whether or not it's truck trucks, equipment, you know, whatever it is, credit cards, pay it all off. Start over. I mean, we we all know guys who've done this for years. Where yet? You know, you started you have 40 pools. You're bursting at the seams at 60. You sell off the 20 that you just don't fit into or out. You pocket the extra outside of the debt you paid off. And they have great lives that, you know, a lot of days. I'm jealous of that. And I'm always open about it that, you know, hey, having employees is not always fun.

Dustin Anderson:
And it takes many years and a lot of practice to get good guys. I guarantee no one starts and hires five excellent, great technicians. You go through bad guys, you get your bumps and bruises and you keep moving on. But this is not for everyone. So don't feel like if you're running a business right now and this sounds overwhelming and you're reading this that you are. Yeah. Failure in any way, you can still be a very positive contributing member of this industry. And we all respect you for it. All we're asking is that if you do decide to have employees, have them do it legally and do it right, step up.

Greg Villafana:
That's the honorable thing to do. We should all be thinking long term for our business.

Tyler Rasmussen:
Yeah. And again, we didn't all start that way. No. So it's it's not like we're saying today. Tomorrow you go out and do it. You know, you got something to work at and you had the build up to getting to that point.

Dustin Anderson:
You know, it's hard tomorrow. Just take the first to make the move. It's hard. Hard.

Greg Villafana:
It's so I think that's the thing that like there's there's nothing special in any of this. Like you're going to it's going to be difficult. And it is hard. And there are sacrifices you have to make. But if you signed up to be an entrepreneur or be a business owner, that's exactly what comes with it. There's no magic pill. There's hard work.

Greg Villafana:
That's no successful business owner will ever like. Right now you got Pool Chasers podcast. That's about as close as you're gonna get. You know how the magic pill, right? Because I mean, this, you know, inspires you.

Greg Villafana:
This isn't everything but inspires you to go down the rabbit hole of hopefully a lot of people are going to be clicking some links and going totally and filling out some paperwork and trying to get this moving.

Javier Payan:
Well, also, too, you know, like just to jump back on on Dustin's comment, you have to decide what you want to do and whatever you do, just do that. Well, and being an employer is not for everybody. You know, I was talking to someone and I said, you know how many times I've wanted to quit since I started this business. And I was like five times. No, like 200 times. It's hard. It sucks. And when all the bills are paid and the phones quiet and everything's handled, it's a it's one of the greatest feelings. How many sleepless nights and, you know, going out in a truck on a weekend or late or whatever, because it's your name on the door and you got to go handle things. And it is not for everybody. And sometimes I wonder, even if it's for me. But, you know, from my point of view of this, what we're doing, we're gonna do it. Right.

Greg Villafana:
Right. Because once you do do something right and you win, you win big.

Greg Villafana:
And that's the biggest, best high that I love in being an honest. Because when you do something right, man, it makes you feel like a million bucks and it just takes you to another level where you just want to you just want to keep going. And then when you've done it for so long, it's like you almost feel like you can't do anything different, but you definitely have to be smart about it. Yeah.

Dustin Anderson:
When you crash and burn. Yeah. And you also, you know, you pick yourself back up and you learn a lot from it. That's also an amazing feeling, you know. I mean if you if you manage to crash and burn and not lose it all or hurt somebody or whatever, you learn so much from it. And if you have if you're the right type of person, they can learn from your mistakes. This business will put you through it. I promise you will. You will fail so many times trying to get something to work. Right. You know, I fail and make mistakes every single day and try to preach to my team all the time. If you don't make mistakes, I'm worried about you. You know, we all make mistakes. And all I ask is that you own them. Help us fix them and learn from them and move on. And that's just that's that's just life. But you know that our business I think it's really important to make peace with, you know.

Tyler Rasmussen:
Yeah. I think you got to love the process and love the learning man. Love the losing. That sounds weird to say. But, you know, it's part, you know, that the losing hurts and really bad, but losing also if you know how to learn from losing. It's one of the best frickin things you can do. You're like, yep, that's never going to happen to me again. And it's never going to happen to that guy, you know? So there's a big piece of it. Sure. Did you want to. I mean, I kind of just read through those three that ABC real quick. Sure you have it. Just just everybody kind of. We can move on from from that topic, but just kind of what those three ABC.

Dustin Anderson:
Yeah. So I mean, the way that they. I mean, this came from the California Small Business Association. I think that we all agree. This is how it was worded. And this is to me a little hard. But like Rich said, that's the second one that really applies to our business.

Dustin Anderson:
But A is the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work. And in fact, B is the worker performs work that is outside of the usual course of the hiring entity's business. C is the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed. B is the worker performance work that is outside the usual course of the hires and it is his business.

Dustin Anderson:
So if your pool service company 1099 pool service technicians, you're done. They're employees. They are not 1099. And I think that is 90 percent of this conversation. You know, pretty clear. Pretty clear. Mean what.

Javier Payan:
One of the things that I don't agree with that part of it like for example, Dustin's a licensed contractor and I'm a licensed contractor. We talked about contracting earlier. If you're going to contract the week, we can contract with each other. The problem I have with that is if I clean pools and doesn't clean pools, we both have our own businesses and have our own licenses. If I hire him to clean five pools for the for those five pools. He's my employee, which, you know, there's not a lot of thought put into that. But that kind of really makes things kind of jacked up because here we're doing everything and to comply. But that law changes everything. Now, if Dustin is a leak detection guy and I don't do that and I hire him to do that and he's a contract Naama contractor, we're all good, you know, because he's not doing directly what I do.

Dustin Anderson:
So I've kind of slowly started making peace with this because of what I used to struggle with was as we build routes in this business, typically the way it works is, you know, you have one employee, you work every one until they're bursting at the seams and get ready to quit on you. And then you take the step to hire the next employee. And that's actually two steps backwards because you lost a ton of profit because now you're paying the next guy. His route is very light because you just don't have enough pools for everybody. So you give some year away, you take employee ones pools away, you give it to them.

Dustin Anderson:
What is OK in this business is to hire part time employees. Just because you're going to work for me and do 15 pools. Why can't you be an employee? You'll get a paycheck like everybody else is going to be a lot smaller, going to get a pay stub. But it's legal. You can be a part time employee. I don't care if you have another job. I don't care if you work for other pool service companies. But if you come in pools for me, you're an employee and I'm going to pay you like an employee. I'm going to treat you like an employee. That's OK. I used to kind of think that if you were going to commit to having an employee, you'd offer a career package to somebody. I think that it's OK to say, you know, hey, I just have 15 pools a week that I need done. Let's make a deal. You know, we'll figure out what it is. But you're going to fill out the proper paperwork. You're going to be held to the same standards that I hold all of my full time employees, too. And when you're on my clock, you work for me. You can't be do another pools in between my pools. It's OK to work for me only Mondays and Tuesdays. That's I mean, part time jobs. OK. There's no problem with that.

Rich Gallo:
I agree with Dustin over there. As far as it's a good idea that if you only have a day or two of work to hire somebody and say you're going to be part time. I've always thought that I didn't want this guy working for other pool guys and I still don't want them.

Dustin Anderson:
It's not ideal. I don't. Yeah.

Rich Gallo:
So what we've done the last two, three years, that's real. We really, really work for us is we've actually hired recruits from staffing agencies, so we've called temp agencies and called staffing agencies.

Rich Gallo:
There's a lot more of them that are labor jobs, you know, for day laborers or work in a warehouse type things. But guys basically just want to work and work with their bodies and their hands.

Rich Gallo:
So we've done our last two hirings have been from the staffing agencies.

Rich Gallo:
And what that's really done is that company as a third party, we have pay them the hourly rate for that guy.

Rich Gallo:
But they cover all the payroll tax, they cover all the workman's comp, which is really nice because everything on that level is on them and that is their employer. And I'm just a customer of that staffing agency. So if there is any type of issue where it ended today, it's not going to work out. When I signed that contract, it says it right in there. All I got to do at 5:00 is call and say the contract is terminated and that guy does not show up tomorrow. End of story. So a lot of different other issues that go hand-in-hand with, you know, hiring and firing people. That's a real nice, you know, way through that one. And you're going to pay a little bit more of premium per hour on that. But for me, it's it's been well worth it.

Tyler Rasmussen:
I like that. Sounds like it. Oh, yeah. You can buy them out then to you. Oh, yeah. That's different that there's whole contract. If you get a guide, it's really, really good.

Rich Gallo:
So my contract's always when you have to do a minimum of seven or 20 hours, that's the magic number I guess, which is usually three to three to four months. And once you do that, then you can basically hire me as a full time. If you've got a guy that you really like after the first week or two, you can buy him out. There's buyout clauses and sometimes a two or three thousand ton bunch of five or ten thousand depending on the guy. And they use that as a little tactic to basically like because he's not your employees, they're employees. So if you know he's working for you, they can have the right to say, always go work for this warehouse this next week. They don't want to really do that. But the last guy we got was really, really like Derek Jeter. Pool, guys.

Rich Gallo:
You know, and I knew this going into it. And they told me that.

Rich Gallo:
And I'm like, man.

Rich Gallo:
And so I paid a premium perm per hour and there was an extremely high buyout on him. And I said, now just hold out. And there's the guy. Before that, we kept them on for an additional six months before we brought him in, just because it worked out that way where, you know what, at this point, right now, for my own personal reasons, with the company reasons, I want to have that guy right where I want him and need him as far as their liability insurance or workman's comp. And, you know, do what I need to do on my end. But it's a really good option and a really good tool. And it is not that much more expensive than do it on your own.

Greg Villafana:
Right. I don't know why.

Greg Villafana:
I just picture this guy like at a signing table, like when the baseball player is signing on the pool guy and he's just got like a suit on his side. So An, I know it was almost it was almost exactly like this guy said. He's got the nice suit on with the big old pure swim, right? Oh, yeah, yeah. Likes to swim. So, guys, this guy's 6 1 24 years old.

Rich Gallo:
I'm look at and I'm like, all right, this guy's got workout real good looking at me like. Yeah, we know. Yeah. So what's that buyout? Oh, really out, man.

Rich Gallo:
I'll just I'll take him the term and I'm like, well, you know, we have him over here and he's like in this job and this company is like it wasn't in a pool company. You just might. Now I get it. I get it. Good, good. So it it turns out that it was, you know, for the last two hirings we had, it was a really, really good fit. And there's things out there. I mean, another whole thing about this five. Is he any you know, you going to deal with the cost of payroll tax?

Rich Gallo:
And, you know, you got to do the cost of workman's comp. There's so much more you're going to deal with. If you've never done payroll before and you've never you know, it's just twenty nine. You got the accountant or CPA handled at the end of the year. Now you're going into payroll. You know, you're doing this every two weeks. This is all new to you. You know, automatically that's gonna be a thing.

Rich Gallo:
So there's other costs involved with that. So this other way of using this, the staffing agencies and having it all done, it's a nice way to transition. And you know, the time keeping an timecards and all that, there's a bunch of legalities just on that meal breaks. You know, they will do all that. You know, they're responsible for all of that. You know, any type of any and all regulations, state and federal, they are on that.

Rich Gallo:
So it is a nice way to, you know, have out there is an option to do it. And they actually offer this. A couple know, take your current guys working for you and convert them to their employees and send them back to Ed's.

Rich Gallo:
It's an interesting concept, but if you just don't want to deal with any of the extra cost or not the cost, but the actual figuring it all out and get tied up in that. And that's been a big reason why you haven't done this, because it will definitely was for me back in the day. It just didn't want to do something wrong and I want to step left. I need to step right now. There's there's there's a resource there that will do all that for you. You'll pay for that. But it just completely removes you from all that.

Dustin Anderson:
I think that's good to know. Well, you talked about the payroll part of it and all that, too, because I think that's one of the big challenges for people is it's intimidating. It's a lot. You know, you use maybe you have everything going for you where you go. You know what? I want to be an employer. I want to have employees. I just don't know anything about this. And Javier has talked, you know, been said from the very beginning. He made the decision, got a payroll company right off the bat. It's not you got to pay for it. It's not free. No one's is going to offer to do this for you for free. That's a great option. That's a killer option. Like for me, I'm like like my wife runs that side of our business. She's super smart in accounting and takes care of all of that. And I'm really lucky for that.

Dustin Anderson:
But I just think that people need to understand that if you are going to jump in to do this and you are content with doing it the right way, spend the money to get the support that you need.

Dustin Anderson:
Do the research on how much that costs up front so that you're not so surprised because when you don't pay your payroll taxes. I'll tell you right now, they're going to get that money. Promise you they'll get that money. And it's not if you decide not to give it to them, they'll come and take it. So, you know, you have to. It's not your option. If you're going to be on the radar play by the rules staffing agency is fine. Get a smart wife.

Dustin Anderson:
Get a you know, whatever you want to do.

Dustin Anderson:
I don't care what you do, but do it because they will not let it slide. It's like child support. They're going to get it.

Tyler Rasmussen:
We hired a payroll company right off the bat to when we started employees. It's a really good thing to do. I mean, you know, extra whatever it is, 600 bucks a time or whatever. But it sure so much better than paying 20 grand down the road, you know?

Javier Payan:
Yeah, it's actually a really good value because then now that's not a person you have to hire. Right. You know, to to fulfill that role, they take all the responsibility and they do all your filings for you. So you just basically report your hours and. Well, where are they ready to get your payroll?

Dustin Anderson:
Company doesn't yell at you and you don't do it like you're right. So break me down. Yeah. So I have to answer her. She's the boss when it comes to that. But I'm happy to have her on the job.

Javier Payan:
And it's interesting, when when I heard my first employee, you know, you start getting all the requirements, stuff that you have to do from the state of California, it's like, oh, my God, this is like stacks and stacks of paperwork you have to have to do. So I it's not me. That's not what I'm going to do. So that's where a payroll company comes in real handy. And I think back in those days, it really like for one employee, it's not a lot of money. It could be 50, 60 bucks a month. You're paying, you know.

Tyler Rasmussen:
Yeah. So on a move on from that. But I think what you said about hiring part time employees is is really cool with this day in age of millennials in the word. But like there's people who are looking for that type of thing. I want to three jobs they want to be able to balance between when they do you go hiking, go on trips, go on vacations, years, do all this. They want these small, tiny houses now with no light, you know, no liability, no no responsibility. So it's cool. It's a cool way to do it, too.

Dustin Anderson:
But yeah, I have opportunities for four part time guys that are unique positions, if you will. Not the standard. We're not running a route, but I've got something where you could work multiple other jobs and not be in anybody's way. Sure.

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Tyler Rasmussen:
You know, we've talked a lot about it, really, but let's define kind of what an employee looks like. So what's the proper channel if you're going to hire somebody? What do you what? What's the next steps? What makes them an employee?

Dustin Anderson:
You know, I mean, when you start off with a guy, I mean, I guess going to the very beginning when you're recruiting or trying to get somebody, I think making sure that you have your ducks in a row when you have the conversation with somebody, especially if they are from the pool industry, don't wait until you're negotiating a deal to let them know whether or not this is a ten ninety nine position or if you need to be really clear about what you expect from somebody if you were going to ask them to join your team. I've learned in the past that if you're so nervous, you get excited. This guy might be a great fit. You really want him? You think I'm going to pay whatever it takes to get this guy on the team. But maybe you guys have they have different expectations or need different things in their life that you can then you can offer. So you need to make sure you're very clear about that. But having your paperwork in a row, you can get all of this online.

Dustin Anderson:
It sounds like it's a lot. It's not something that you have to have custom, but they need to fill out a job application. It needs to be. Ours is very generic. It's not something that's. But we keep it on file and it shows that this person has applied to work for us. A handbook company handbook. Ours has changed over the years.

Dustin Anderson:
Every time something happened, somebody who gets fired or quits, we end up adding a whole new paragraph about, you know, maybe next time you shouldn't do this. This is you know, it's like over the years. It grows, it grows. We get feedback from other people. So an employee handbook, I think is is essential. You need to have that together so that you can always. We we try to revisit. I'd like to go back and say, OK, this is in the employee handbook. Like, hey, notice after you've been here for three or four months, all of a sudden the flip flops are coming back. Like what happened? You get comfortable. But, you know, we you signed this employee handbook that said you understand what we expect from you. Same thing with like an employment agreement. It needs to be written now and spelled out the compensation, the expectations of the job description, everything paid vacation. All of these type of things. These are not things that should be done with a handshake jotted down on a bar napkin. They should be done officially signed on. Everybody should get their own copies of them. This is not this is not hard to come up with. It does not have to be super fancy.

Dustin Anderson:
And as you get larger, you know, become a bigger company, its 100. Most guys would say they probably consulted with some kind of legal help to get it together in a way that's that's. But we don't have that at my company. We're not a huge company. We have, you know, five employees. It's not a. And it works for what we do.

Greg Villafana:
So we're like invest in a one time. You got that checklist in the front of it. We talked about with Gokey pools, and it's like you put the time and effort into the first initial like, how are we going to onboard a new person? Yeah, we're gonna put it maybe in this manila folder. We're gonna put it online as well in the cloud. But you should have a checklist. You know, if it's application, it's drug test, it's, you know, background screening, whatever it is that you got to do. If it's 10, 15, 20 things like shit, if it's all on a checklist like who cares? This is bang medicine packet.

Greg Villafana:
It's easy. Get it done.

Javier Payan:
Driver's license. You know, we used to have a cop photo a the driver's license, Social Security card. You know how many depends to have. And the one you deal is Payroll company. And you can also download these types of this is the things you need, you know. You know, in order to put them on payroll, when you have a payroll come, they guide you to. But, you know, it doesn't say, hey, you know, we're just five guys. Hey, we've got one guy or five guys or a hundred guys. It's pretty much the same thing works. I think the cap and life changes at 50 employees bullets. Just say you got thirty nine employees or 10 employees or five or one. You still have to comply with the same stuff. And you know, some of things that you have to comply with, like the Family Leave Act, transgender rights, meal breaks, overtime discrimination, harassment. You still have to comply to all those things. Those are just some notes I took off of the big posters that I never read when I walked by in our office or what's on here. It's like what?

Dustin Anderson:
It's a lot. It's a lot. Fisher But, you know, like I said, if you have the checklist, you put the time and the effort into getting it together once.

Dustin Anderson:
That's it. And then you just, you know, especially a payroll company and somebody can help keep you informed as the laws and regulations change. You don't have to feel like you're in such a mad dash because I felt that way before where the stars align, there's somebody on my radar I really wanted to hire, but I just didn't have everything put together. And the first impression as an employer, I mean, if you're getting after a superstar, you better have your stuff organized. And you know, it's not just about the money you agree to pay that person. That person expects a certain level of professionalism from you as an employer. So do the work, put the time in and get this all put together. Because, you know, legally, like, you know, we've got to make sure that you have that you can work the US, you know, get full I-9, yet supply the I.D., set the tax paperwork is all really important. That's not the kind of stuff you say. We shake hands, you clean pulls for three weeks, then you say, oh, you know, I've meant to ask you, I need you to fill this out like you do the work first.

Dustin Anderson:
That's the film's emotional thing to do.

Greg Villafana:
Those were some of the most embarrassing days back in the day when we had.

Greg Villafana:
This idea that these these meetings would be more organized when somebody applied for it and it was just like, yeah, I could be over there in 30 minutes and we didn't pronounce anything and we're just kind of, you know, doing it and they just leave and I just like to that sucked. Like, that was terrible. I the most unorganized, especially when it was somebody good that might have just slipped through the cracks. But as they're like, you know what? I think I keep looking. I'm like, yeah.

Greg Villafana:
She had a meeting at Culver's. I've done it, too. It was our meeting. And we're gonna have a cigar in the back. Yeah. It's so awkward. Yeah, that didn't actually happen. But I'm just saying that there were some times where it was just very unorganized. Over seven. Yeah. I've done multiple job interviews at Chili's. That's kind of my house, my fancy. Yeah. I interviewed the same guy twice at Chili's. Yeah, that's right. I'll take a water. We'll see where this goes.

Javier Payan:
Yeah, exactly. No ice noise. That's. Right.

Dustin Anderson:
But you learned from those situation. I think most we all have had them but like you know. Yeah. That's a good thing is you want to be prepared when you have the opportunity to interview someone, whether or not it's a superstar or somebody that, you know, diamond in the rough or whatever it is, you want to be prepared to, you know, roll out the paperwork in the company image in a manner that is going to set the pace for the relationship moving forward.

Javier Payan:
You know, seeing as as pool technicians, you know, we're comfortable on hoses and pools and muslin heaters and pumps in and out equipment, rooms and payroll stuff for the song even. To me, that's not stuff I like doing. Hey, don't. It's just it's tedious stuff. And just like somebody breaks up and go fix really quick because I don't want to do boring. It is it it's born and but but you know, it's it's a necessary evil you have to do. But also to like if you're not good at that, get someone that is good at that, you know, a smart wife that'll help get into, you know, somebody that can meet like a bookkeeper and come in for a couple days a week and just help you out with that. So, you know, if you if you're on board somebody, hey, this is hands off to the bookkeeper, should she'll get a list of handles or he or she or whatever. If that's not what you're good at. You know, don't you know, there's a lot of things, believe me, a lot of things I suck at. But. And that's one of them. And so you just get smarter people than you to do it. And it doesn't have to be a big a full time job. You can get people to do this part time for you.

Dustin Anderson:
I think that's such an important thing, having just in business overall. And I've been talking a lot about it lately, because the older I get and the longer I've been in this business, I start identifying things that I'm just not good at. I've always been someone that has told everybody I'm not a good pool cleaner. I never have been. I mean, my first my first pool cleaning job that I had, I had to be the worst pool cleaner. I didn't get fired, but I probably should have been. But there are things that I am really good at.

Dustin Anderson:
And so as I start getting further along, I start understanding, you know, my team, guys who have been with me every year that goes by like I'm at that point now where I go on jobs with guys.

Dustin Anderson:
And I realize you're better than me at this like you used troubleshoot this heater or you install this automation panel. You're just better than me. So I need to get out of the way and I need to let you do what you're good at and I'll do it.

Dustin Anderson:
I'm good at. And the paperwork and the business side of it, I'm not very good at it. My wife's really good at it. I have guys on my team that are excellent pool cleaners. That's not for me. I'm really good at building up business. My contacts, the people that I know over the years and just cultivating new business relationships for my company is what I'm good at. So I identify that as my strength. Pick a lane, stay in it, hire people and get help in the areas you're not good at. Because I guarantee you. Like, that's that's the thing about our industry. You know, we're electricians, we're plumbers. We're chemists. We do have so many different hats that we wear. Sometimes we're not good at all of them. So get the help from the people that are good at that. And that's how you build a strong team.

Tyler Rasmussen:
Most of you, Rich. What's an employee to you?

Rich Gallo:
Everything. I mean, it's basically I listen to what you guys said. It's I do everything you said and I appreciate you saying it, because Javier over here is a guy that told me just a year ago about the employee handbook and he got me on that. And that's another great thing about being part of this podcast and being part of this industry at this particular moment in time.

Rich Gallo:
There's more more of this networking and more more of this, you know, brotherhood and coming together and saying, hey, listen, you know, I know we're competitors, but, you know, we can we can share these items and share these young jewels. And again, it's gonna help. You know, what's helped me is going to help you. And it's going to help us together as an industry. We're going to grow. So I can't do anything without employees. So they're everything. You know, we all come from a certain starting point and growing. And it's been a long, long time ago. In twenty nine years is a long, long haul. And this doesn't happen overnight. And we just encourage you to take that first step. You know, after listening to this, you know, I think all three of us are definitely available to anybody out there. We're all approachable and we're open books. And definitely would want to see, you know, like minded people out there, you know, raise up to where we all need to do.

Greg Villafana:
Yeah, I think if I lived in this area. Are you guys in a group? Right.

Tyler Rasmussen:
I'm not Napes anymore.

Greg Villafana:
PHTA, group it is and whatever the meetings look like, men be the first to jump into that in. Just ask all the smart dumb questions, whatever questions you have, like ask them all, hang back afterwards and just be a part of it.

Dustin Anderson:
And just the networking part of that is so big, you know. And that's that's like what we're doing. You don't just depend on Facebook. Yes.

Javier Payan:
So it's interesting. So I got to kind of put my. Actually, we still call ourselves the APSP. You know, pHTA came out with the name change and with the merger there with us, we felt as a chapter. We're still a Sanrio County Association of Post-Bop Professionals. Now, Dustin's on our board, enriches our board and reaches up in L.A. County. He comes down to our meetings and really, you know, we don't really have a compass like this is the playbook. Here's how we're into it. We just know that there's there we're living in a really, really cool time right now where there's a lot of really good guys. I consider these two gentlemen really good guys. You guys are really good guys.

Javier Payan:
And for us to build pick the phone up and call each other is really cool. But on a more formal setting, cyclic work, what can we do to help the industry? So we formed this chapter. And really what we're trying to do is trying to have relevant topics that will draw a crowd. But more importantly, what we emphasize on is the networking, the networking as is I mean, you know, with all the stuff available, YouTube and stuff on the Internet, there's nothing like talking to someone, you know, face to face. And and yeah, I've had that problem and this is how I dealt with that or hey, I don't know if you should be doing that, you know, because these are some pitfalls that you should think about. But really, that's the big. I think one of the big driving components of what we're trying to do is just assemble the best guys that we know and let's meet kind of on a formal basis and let's try to make each other better. Right.

Greg Villafana:
And that's all healthy competition you think of like truck drivers. They work for different companies, but they might hop on that CB radio and they're looking out for each other because they're like, hey, there's something coming up ahead. I'm about a hundred miles ahead of you or 50 miles or storms coming in. Whatever it may be like, that's a we should be we might be in the same state, same city, same area, but like work together. And if they are your competitors, that's super healthy competition. If I was here, I would we would like to compete with guys like you. Yeah. Because we're gonna we're gonna just, you know, bring ourselves up altogether.

Javier Payan:
But also to think about it, if you're new to the industry and you know your whatever age you are, whether you're came to this tree later in life. But now how cool is to be able to hang out with like minded people? You know, and so Greg Garrett used to say, you know, do you want to soar with eagles or you want to, you know, eat crow?

Tyler Rasmussen:
Yeah, I think so. Yeah. Road kill crow. Yeah.

Dustin Anderson:
I mean, the networking part of this and you guys talked a lot about it when you starting with the you know, just the attitude at the counter, at the at the wholesaler. You know, you need help. You you have questions. But it's intimidating to ask other people these questions. Some, you know, pulling the strings had a crap attitude for a long time.

Dustin Anderson:
And so I think that's what we're doing with this family, just what we're sitting here doing today and with our APSP group. I mean, the network and the friendships and the just the amount of like a you know, I'm starting to mentor some of these younger guys and I'm meeting some of these guys that you may have heard their names. They've been in the industry for 40, 50 years. They paved the way for us. But I've never met them. But here they are, come into our meetings sitting in the room and, you know, and having done a great job putting all that together. And I just I've seen a shift in this industry for the better.

Dustin Anderson:
You know, everybody is becoming more friendly and a little more open. There are plenty of pools for everybody in case anybody didn't know that there are plenty of pool get on airplanes.

Greg Villafana:
Yeah. There are no fly around there, see?

Dustin Anderson:
Not a single pool out there that is going to make or break your business. So if you lose a pool or you gain a pool, that doesn't matter. It's, you know, your company as a whole is is is important. But you don't need to be so competitive to where you cannot be friendly and you cannot be part of a network with other people. And I encourage everybody that's getting started or that is interested in learning more about what we're talking about. Make a friend get, you know, tuck under somebodies wing that's already done it. And hopefully they're willing to share some information because it's hard to get training in this business. I mean, you know, water chemistry training or we can learn how to install pumps or whatever. But this part of it's hard to come by. The easiest way is join a group, whether or not it's it's a PSP, whatever it is, get involved with something, because I've learned so much from from just being around all these guys. And it's a very small investment of your time. So I think that's important.

Greg Villafana:
I think that's the best thing you can do, because everybody that's been on the show has been a part of some type of group. And we know when we're at the distribution, picking up parts and things like that, that those were the most negative people and learned right away that misery loves company. They don't want you to be successful. They don't want you to question things. They want you to do it this way. That hasn't been thought out. And they want you to screw up just the way that they did. And I hope those people get better. But if that's not how you feel like, do. Question everything and find a group that is meant for you.

Greg Villafana:
And don't just take the worst thing I hate is that's just the way that it is. We can't make it better. That's just the way that it is. I hate that freakin sentence.

Greg Villafana:
It's like, nah, I don't believe that. And, you know, I'm gonna I'm gonna move on. I mean, you're not a hater. No. Yeah. I don't I don't think I ever heard you say hate. I'm not.

Greg Villafana:
But I truly don't like that because it's like, don't do that to yourself. You're smarter than that.

Greg Villafana:
The way it's always been. Find new friends. Yeah. That's the way it's always been. Like, that's bullshit. That's not the way it is.

Dustin Anderson:
Yeah. Find a new group. Man, that's that's I mean you are as good as the people you surround yourself with. And this this industry has been pretty clicky. I've noticed as I've come up and I just you know, it's such a positive thing. And we all for years, it's always like, you know, we wave to each other, the pool guy wave, you know, but everyday secretly flipping each other off, you know, it's like I saw this dude, my neighbor, I know he's knocking on my door.

Dustin Anderson:
It's like, move on, man. There's it's just a bigger picture, you guys. We all need to contribute in a positive way. And ultimately, we're all gonna make more money if we're just more positive and, you know, push, push each other a little bit. You know, we all need some encouragement. I need it. Everybody needs it. So just be positive for the people you're competitors. You know, the more positive you are about stuff, the more we'll come back to you, I promise you.

Tyler Rasmussen:
Sure. I just wanted to kinda touch base about, you know, what it looks like to as the employer to have employees. I don't want to gut dive deep into into context a little bit on it. But, you know, it gives you the control, you know, over meetings, gives you control over when and when you want to have those means. When people show up, you know, how long they how many polls they do. You can't control me positive. They're important contract. You're not supposed to be like, yeah. You know, if they want to do temples, they can do temples and bounce, you know? I mean, if you give them fifteen and they wanted you ten, they can do ten this. You know, when their employer, their employee than you can tell them fifteen. This is your job is what you do right. You get better quality, you get high retention, you have a stable environment, longevity. You know, the employees then become part of a team with an established brand as you talked about, you know, use protection for the employer and the employee that way. And also, obviously, when someone gets hurt with workman's comp, there's a lot of benefits to it. You know, that we've kind of touched here and there on. But those are some of them. And they're very good pieces. And like you said, at the end of the day, if you can go home and be be okay with it and be happy, that's a feeling you want.

Dustin Anderson:
Absolutely. I mean, that stuff is so important. And maybe you are running a business for that stuff's not important to you. And I guess that's OK.

Dustin Anderson:
But if you create a program and you create a company with a you know, an environment and a company culture that you're proud of, and that takes a lot of time being able to kind of roll programs out amongst the your team and expect them to jump on board and support you. I mean, my guys will take a bullet for me. My team is like, you know, they are everything to me and I would do the same.

Dustin Anderson:
And they all know they get paid before I get paid. I'll sell every one of my vehicles. Also everything I have to make sure that we clear payroll. There has been times where I've had to borrow money to make payroll. Those are the things that you have to make peace with. As an employer. But having guys that are employees as opposed to independent contractors, the amount of control you have, which I mean, I know it's kind of weird to think like, you know, I have to have all this control.

Dustin Anderson:
It's just that, you know, somebody has got to be steering this ship, you know, and you find when you have so many cooks in the kitchen, that's where things start getting a little bit weird. So, you know, somebody makes certain programs and then the team jumps on board. We try them and if they fail, then they give you feedback and we readjust. No, but when everybody's doing it their own way and you're just struggling to get anything to happen. It's a real crappy feeling. And I've been there before. So it's like I think there's a lot of benefit to having a strong team.

Tyler Rasmussen:
Everybody wants to be a part of a team. I mean, the good people. Right. Like, they all want that feeling of. And people don't want to be the boss. I mean, lots of people don't have you, boss. Yeah. But they would you want to feel like they're part of something that matters. Absolutely. And you're giving them something that matters by by employing them. Because all the stuff we already talked about, you know, we don't really reiterate it, but it's you're giving them a feeling of I'm a part of something. I have something to live for. This is my team. This is what I do. You know, if you're just some random guy, it doesn't matter. That's what sometimes that's what it feels. If you're a tenant guy, you don't matter. Yeah. Like you're just as dude cleaning pools. And I know that feeling. I seen that feeling in our in our guys. I mean, I've seen it like they do. Don't care about me. You know, that sucks because we've got. We do. Like I cared about each one of them so much. But it's like there's only so much you can do when when they're your employees. It's like, I don't care. Like I'm gonna the next guy. See you later. That's tough because you do care about those needs. A lawyer and by everybody, everybody. That's just human nature to be to want to be loved, to want to be a part of something, to to be part of a team that, you know, you're contributing to life. That's how you stay positive, you know, and that's everybody wants that.

Greg Villafana:
You got to treat them like like warriors on the battlefield, like this is this is war. Every day we wake up, we're at war with ourselves.

Greg Villafana:
Were were with the situations, all the you know, the virus has going on. So many things going on. And when you do things like educate yourself, do the podcasts and the things that you're supposed to be doing when it comes time to get out there on the battlefield and do what you gotta do, like you're prepared on your leader has your back and all these different things. That's why the books that talk about war and how they get through all of that, so much of that is on, you know, leadership and you know, all the things that we're talking about right now where you say, I'm here.

Javier Payan:
Yeah. Now I'm just scratching my my chin. Here it goes. Ponder. That's actually pretty pretty cool. Hey, what I was going to also add is that, you know, you talked about, you know, being wanted and respected, loved the whole. All those things are more important than the rate of pay. I mean, it's it's in study after study when they asked people, what do you like most about your job? Pay is not number one now. Yeah. That's important. And you know, to have good people, you've got to pay them well. But really, all those things that is talking about, those trump anything money related, most of those all those things are some dudes some days want money.

Javier Payan:
Well, yeah, I know a lot of people are. It's it's important, but it's not the most if you're deal with a guy that that's the number one driving factor. He's not. Yeah, he's not your guy.

Dustin Anderson:
I've learned that many times and that's been a part of the team. And sometimes some of the best text with the most talent just aren't the right people for your team. Doesn't make them bad people. But like you said, I mean, they may be really productive. But if they're a negative influence on the rest of your team. You need to evaluate that because I just feel like every day, you know, when when when push comes to shove, I mean, you got to really think about these things.

Dustin Anderson:
Some good happened to me today. And I want to make sure that the people that I have gone to battle for and backed up and done everything I need to feel comfortable. At the end of the day, if something happens to me that they'll all step up and that the show goes on. You know, I've got kids and a family that depend on me. So, you know, you need to make those plans. And if you have people on your team that you cannot rely on good pay, bad pay, good tech, bad tech doesn't matter. He can't rely on them. And you don't have a good relationship and a good, you know, team vibe going then. You got to look at that. You better evaluate. That's important.

Tyler Rasmussen:
I think where the money really matters and we can talk about this yesterday. You have to pay them enough. I'm not saying that's what you're saying, but like you have to pay them enough for them to feel that what they're worth, their hard work is worth. Sure. You know, everybody wants that feeling of like I worked hard and I got rewarded for it. If you're not paying them enough, then they're not going to feel that way. That is a key piece. You can't get the best people, but. Right. Good wages.

Greg Villafana:
Yeah, but you have like a base. And we talk about this all the time. You have like a base pay by you putting a system on and you're having the morning mustard and getting everybody fired up. Like these are our goals today. This war, we're going to go out and this we're going to make happen like let's see who can go out there and knock this out of the park. And you've got spliffs in place and you've got all these different things where you're getting, you know, abuse or the all the different pumps that are making noises out there. They're being noted in the software, all the things that are getting back to your dispatcher, office manager, all these different things. So it's like the ones that want to go above and beyond in terms of finances. They want to be a part of the whole thing. They're going to do it. They're just going to do it. They're going to make the money that they deserve. But the ones that are like, yeah, and I kind of just, you know, do my thing. I'm a cool guy. I fit in here. But I'm definitely not going to be like, no Dustin here, you know, doing, you know, an insane amount of repairs or whatever and reviews and all that different stuff. So, yeah, I think that's always something to really think about is that you can have a team of people that, you know are making a lot of money, but maybe it's because they earned it doing different things.

Dustin Anderson:
Yeah, I like to see that the team I mean, the way I look at it and I hope my team would agree with me is that, you know, we all work together to grow this company so that we can all grow financially together. You know, like when we acquire maybe it's a big new commercial account. It's going to be a lot of work for all of us. Like, I hope everybody knows that that's not. Hey, guys. F.Y.I. Lots more work come in. No more pay. I expect more. Now it's hey, the company's growing. You were here when you know, you you made it possible for me to acquire this account because you were taking care of the business while I was out making these relationships. So as we all grow together. And that's why I know. And so I hope my team would agree with us. I think they would say that. I mean, that's the incentives to stick around. We've done we've grown so much in the past couple of years and we're all excited to see what's going to happen next. And that doesn't really happen with guys that aren't company people. They don't really care. Paycheck clears. I clean my pools. I'm good to go. Like you won't see.

Greg Villafana:
We won't respond to leadership yet. Like that. Mean something to them? Yeah. Yeah, it's important. You know, there are obviously different liability levels between the two. Can we talk about the liability level once the decision is made to make somebody an employee?

Dustin Anderson:
So if you have a ten ninety nine and you're sort of doing it right, you're making sure those people have their own general liability insurance. I've never had this experience. Maybe you guys have. But you know, like let's say you have a 1099 that's run somebody over, hurt somebody, whatever it is. Do you still get sued on that? I mean probably. Yeah.

Dustin Anderson:
You know, you're still involved. And also, I think a lot of people think that because this guy has his own insurance, I'm free of any liability that happens. Whoever whatever he ruins or hurts today, that's really not the truth.

Javier Payan:
Well, would you don't have control over is whether he's paid his policy. Sure. No, you don't know if he's got canceled or if you're listed as additional sherred. Maybe you'll get a notice. You know, 30 days later, some like that. But, you know, it's the perception of who is working for. So he hit somebody and he's got an auto plan for fifty thousand bucks, but it's a hundred thousand dollar claim. They're gonna go looking for everything and ask a lot of questions. Hey, you got some extra money? Come up. You know your insurance lingo so far at that point, you don't think that guys will say, why work for Dustin? I worked for 10 years. I got a shirt on. You know, he gave me this cool hat. You know, the whole thing. So the thing is, it's in terms of liability, you're just so beholden to the two to the weakest link there. You know, sometimes something goes wrong. To me, that that just opens up a whole category liability in terms of being an employer, you're liable for everything. But, you know, if if he gets hurt on the job, you're liable. So you have workman's comp insurance. You know, if he overflows a pool, you're liable, but you have liability insurance. You know, he gets in a car accident, you are liable, but you have auto insurance, you know. So as as Rich said, you kind of, you know, protect yourself against all the things that go wrong. And and when you become an. Lawyer And your pain. Tough on the on the paystubs, you know, like the unemployment insurance to do Social Security, all that stuff is there to kind of protect you so that when you do have to terminate someone's job or they get fired, they quit or they're going on pregnancy leave or something like that, her family leave stuff, that stuff's built into it. So you again, you are liable for all of that stuff, but because you're paying into it, then like you're fine.

Tyler Rasmussen:
Yeah, I think the point want to make is, like you just said, like, don't think that you're not going to be liable in some formal way if I don't don't ever try to be cute and clever.

Rich Gallo:
You think that you're going to outthink the state of California? Here's a little caveat. Right.

Rich Gallo:
So guys in California know about California, California State license board and having a contract as license. Right. So when it comes to workman's comp, you're either what you're one of what either exempt or you have a policy. Right. And so if a guy is working by himself or doesn't have an employees, he's exempt. Right. OK. So the exemption on that is a classification through the California State Contractor's License Board only. That does not mean he's exempt from not getting hurt and being sued or that coming back to you. So you could have a guy working for you as a ten ninety nine with a C 61 D thirty five, which is a swimming pool maintenance classification for the contractor's license that is exempt. It doesn't have anybody in you know he doesn't have anybody. He's the one doing the work. But he is still susceptible to any workman's comp case if he gets injured. And it's and you know, nine to five business business hours, the health workers are all trained and it's automatically assumed that it's a work related issue. And they'll ask him, you know, where you work in, you know how this happened. It all comes out and that's it. It's flagged. And then if he doesn't have workman's comp and you don't have workman's comp on him and you hired him as an important contractor, it is coming back to you as a fact. So there's there's not going to be smarter than this system. You know, none of us here are attorneys or we're not experts.

Rich Gallo:
And the whole point law arena. But there's just things out there. I mean, it's again, it all comes back to where you want to be positioned and how much, you know, security you want to have and feel at the end of the day.

Rich Gallo:
It's just like that. And one of the things earlier that you just heard from Dustin about that I really like hearing is you mentioned earlier about, you know, your employees, you know, having employees if something happened to you.

Rich Gallo:
Right. And you've got a family. You got kids that these employees would step in and be able to take care of the business at hand and run the business, which would ultimately take care of you in your time of need. So you're not going to get that with on your. I don't. I don't believe that's a that's a huge thing right there for an employee versus 10:29.

Rich Gallo:
So one of the things that all of us here at this table have in common is that we've all had the privilege and honor of knowing where. Garrett Great. Garrett has been a mentor of mine. One of the things he taught me was the law of reciprocity.

Rich Gallo:
So right there. The fact that we're taking care of these guys as employees and if anything happened to us, the fact that they would have our back the same way we've had their back, that is reciprocity right there. So that is that's a shut down right there.

Rich Gallo:
As far as the argument for employee versus non employee. You're not going to get any better than that.

Dustin Anderson:
Well said.

Tyler Rasmussen:
Greene Yeah, well, I think, you know, we've kind of defined each one now. Hopefully, you know, you've listened to this and kind of figured out maybe where you fit into that line. And like we talked about, there's there's options for you. You know, if you if you don't want to be an employer, take the time and figure out that's for you. It's not for you. All these options, you get to get out of it. If it is for you, you know, take the right steps to kind of make that happen. And again, we're not not trying to be super negative, not trying to bring down the hammer on people. We just really want people to understand kind of what's happening and what happens in California usually makes its way throughout the country. So has also been one of the most hot topics in California. It's also been one of most asked for topics for us as pool chasers and as business owners. It's one of the questions we always asked. You know, it's difficult to define this line. So hopefully we've helped define that. And, you know, wherever you fit in this, like you guys have all said, you can reach out to any of us and talk. You know, we're all open to talking about it, but we appreciate you guys come in and spend time with us and making this shift an adjustment to do in this and being set as a life show.

Dustin Anderson:
No, I'm glad to be a part of it. Thank you for inviting us. You guys mean a lot to us, you know?

Tyler Rasmussen:
Thank you. You know, he hasn't been a key part of a pool chasers for us. And your episodes are some the most popular episodes we have because you guys do things the right way and we really respect each one of you for what you do.

Greg Villafana:
So now we're really honored to know you guys because we know how hard it is to run a pool service company and we never got to the level that anyone. You guys are out. So we have an insane deep appreciation for where you guys are at. And all the hard work you had to put in to get to where you are. So great work.

Dustin Anderson:
That's awesome. Thank you. Thank you guys for what you're doing. You're doing a big thing for this industry. And, you know, I think a lot of people are. Everything's changing. People are are jumping on board. So he a big part of that. So thank you, guys.

Tyler Rasmussen:
Thank you. Thanks for checking out this episode. If you want to find out more about our guest or the sponsors of the show, you can check them out on the links we have provided in the write up below. We've also provided links to our social media platforms. So please follow us on Instagram, Facebook, Twitter and YouTube. Our tag is Pool Chasers. The podcast brought you any value. Please do what you can to support us to our Patreon page by going to patreon.com/poolchasers. And don't forget to subscribe to the podcast to be updated each time a new episode is released. One last thing if you're not yet in our Facebook group, join in today to be surrounded by like minded individuals who are all trying to better the industry. Thank you all for the support. We appreciate your time and your ear. See you out there Pool Chasers.

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Episode 90 Topics and Terminology

1. What is an Independent Contractor?

   “People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.” - IRS Website

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2. What is a 1099?

   “Form 1099 is one of several IRS Tax Forms used in the United States to prepare and file an information return to report various types of income other than wages, salaries, and tips. The term information return is used in contrast to the term tax return although the latter term is sometimes used colloquially to describe both kinds of returns.” - Wikipedia

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3. What is the AB 5 Law?

   “AB 5 is a bill the Governor signed into law in September 2019 addressing employment status when a hiring entity claims that the person it hired is an independent contractor. AB 5 requires the application of the “ABC test” to determine if workers in California are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the Industrial Welfare Commission (IWC) wage orders. The California Supreme Court first adopted the ABC test in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903. Among other things, AB 5 added a new section to the Labor Code addressing these issues (section 2750.3).” - State of California Department of Industrial Relations

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4. What is Dynamex?

   “On Monday, April 30, 2018, the California Supreme Court issued a landmark decision in the matter of Dynamex Operations West, Inc. v. Superior Court of Los Angeles. In a voluminous, 82-page decision, the California Supreme Court reinterpreted and ultimately rejected the Borello test for determining whether workers should be classified as either employees or independent contractors for the purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”) in favor of a worker-friendly standard that may upend the existing independent contractor labor market.” - Labor & Employment Law Blog

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5. What is the Labor Board of California?

   “The mission of the California Labor Commissioner's Office is to ensure a just day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. By combating wage theft, protecting workers from retaliation, and educating the public, we put earned wages into workers' pockets and help level the playing field for law-abiding employers. This office is also known as the Division of Labor Standards Enforcement (DLSE).” - State of California Department of Industrial Relations

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6. What is Workers Compensation?

   “Workers' compensation and often abbreviated as Workers' Comp, is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.” - Wikipedia

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7. What is Payroll Tax?

   “Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee’s wages, and taxes paid by the employer based on the employee's wages.” - Wikipedia

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8. What is License & Bond?

   “When you say that you are licensed, bonded and insured, that means that you have the required licensing for your business, proper insurance, and have made payments for additional coverage with a bond.” - Next Insurance

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9. What is an Employee Agreement?

   “A comprehensive employee confidentiality non-disclosure agreement is thus critical to protecting your information, giving notice to all of your staff members that they have a serious and ongoing duty of confidentiality to the company.” - Legal Zoom

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10. What is a CPA?

    “A CPA (certified public accountant) is a trusted financial adviser who has passed the rigorous CPA Exam and met work experience requirements before being licensed. These requirements for licensure ensure CPAs maintain the highest standard of knowledge and ethics when operating in financial positions.” - Wikipedia

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11. What is a Sole Proprietor?

    “A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.” - U.S Small Business Administration

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12. What is Liability Insurance?

    “Liability insurance provides the insured party with protection against claims resulting from injuries and damage to people or property. Liability insurance policies cover both legal costs and any payouts for which the insured party would be responsible if found legally liable. Intentional damage and contractual liabilities are generally not covered in these types of policies.” - Investopedia

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13. What is C61D35 Swimming Pool Maintenance Classification?

    “A pool and spa maintenance contractor installs, replaces or repairs pool motors, pumps, filters, gas heaters and any above ground piping in connection with pools; includes electrical switches, breakers, pool lights, diving boards, existing solar systems that heat pools, pool and spa acid baths and applies vinyl liners to existing surfaces.” - Department of Consumer Affairs Contractors State License Board

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14. What is I-9?

    “Use Form I-9 to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must properly complete Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. Both employees and employers (or authorized representatives of the employer) must complete the form.” - U.S Citizenship and Immigration Services

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15. What is a Staffing Agency?

    “A staffing agency — also known as a search, recruiting or staffing firm or service — is an organization that matches companies and job candidates. By registering with a staffing agency, you have the potential to make connections with multiple hiring managers looking to find the right people for their job openings. You can save time and find opportunities you may not be able to find on your own.” - Chron

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16. What is the Law of Reciprocity?

    Social psychologists call it The Law of Reciprocity – and it basically says that when someone does something nice for you, you will have a deep-rooted psychological urge to do something nice in return. As a matter of fact, you may even reciprocate with a gesture far more generous than their original good deed