welcome to Home improvement Sales Underground.com

at "the underground" we gotta tell it like it is out there!

Tommy Steele ready for action!

What is your "Legal Status"?

You are not doing this work for fun or to burn up gasoline and brake pads. "Legal Status" refers to HOW you are hired (or contracted)  or paid. Home Improvement Salespeople fall into TWO legal definitions as well as THREE actual descriptions . The following information is not intended as legal advice but rather as a general overview.

  1. W-2 Employee, You may think since you are working, doing what you are told you are an employee. In many cases this determination is based on what  the organization or employer  thinks is best.  Inherent in any employment here in the USA are mandated tax withholding as well as Social Security payments and Workers Compensation Insurance. Regarding how this determination is frequently made by many organizations, I am reminded about the phrase: "The fox minding the hen house". This has caused a WIDESPREAD misuse of the 1099 Independent Contractor classification. Many organizations realize this and  willfully disregard these laws. Unfortunately many States and or Federal Agencies lack the resources or desire to enforce these laws.
  2.  1099/Independent Contractor, " The freedom of working for yourself" could lead to a more family friendly work schedule taking time off whenever needed; of course this is desirable. Remember an organization that makes this determination frees itself from "the burden" of unnecessary taxes and insurance. As an Independent contractor you are responsible for ALL expenses that are paid to go out and 'run leads" every day. While large tax write offs are appealing, the actual earning power experienced is decidedly less than elsewhere in other sales positions. Another potential area for problems regards payment or commissions. Depending on your agreement, your pay is determined by a person who indeed may view this as an "adverse interest" thus seeking ways to reduce or eliminate commissions earned by a sales rep. Unfortunately the legal resources enjoyed by a sales rep are frequently far less than an organization who hires lawyers on an ongoing basis and is ready to fight most battles from a position of wealth and power. ****Due to the confusion these questions have caused legitimate sales organizations, there is a provision in the Federal Tax Code known as "3508" that legally allows straight commission based compensation  while respecting mandated employer  Social  Security contributions and tax withholding  requirements. ***
  3. "Subcontractor or SUB-HUMAN?" ***if you are easily offended , you might not want to read some of the following***The "sub-human" designation is based on an all too real practice of compelling an individual to perform the functions of an employee or independent contractor without the legal benefits of either. Sometimes a company  will compel or coerce a sales rep WORK ILLEGALLY without a mandated license. The contempt associated with this conduct  was once expressed to an individual as"go ahead and run that lead in Washington DC without a sales license, I'll pay the fine" . This conduct reeks of slave like working conditions. One can not assign blame for a CRIMINAL charge. Again there is very little a rep can do to stop this type of conduct. Unfortunately in some cases, If  you are not working as an employee your legal status offers less protection than One could reasonably expect. We know of at least one case where an accomplished sales rep was TERMINATED for refusing to work without a sales license in Maryland. The Maryland Home Improvement Commission was informed about this outrage. They stated they would DO NOTHING ABOUT IT!

How do you get paid?

Let's face it, you are out there running leads and writing home improvement sales contracts for a reason. You want and need to get paid. This may sound simple, however some factors make this a difficult process with disappointment being an all to common result.  Here are the main ways a sales rep is compensated:

  1. Salaried employee (W-2 classification) with or without incentives. This is a rare situation in the Industry. Nonetheless, some companies pay a salary, including mandated social security and tax withholding along with workers compensation coverage.When one considers the turnover in this Industry, this type of relationship is uncommon. 
  2. Straight commission (NOT as a 1099 Independent Contractor)  but a "3508" employee. As an employee you have some legal rights and workers compensation if injured in the job. Yes straight commission may sound unappealing yet given a proper framework with adequate training this relationship can be lucrative for all parties. Commissions can be a fixed percentage or based on the profitability of the job sold. While a fixed percentage is easy  to determine, splitting profits  is based on an invoice generated by the installer or subcontractor, with little accountability available to the sales rep. Of course as an employee there are some minimum  wage guidelines,  yet they may not be adequate to provide a "living wage"
  3. 1099/Independent Contractor, straight commission, whereas in the earlier example an "employee/employer" relationship is established, no such protection exists here. While enlightened self interest (to assure ongoing viable operations) may cause the sales organization to compensate its 1099/Independent Contractor agents fairly in a timely manner, in many cases greed and contempt for the salesperson can exist. Remembering in this type of relationship compensation is based on the profitability of the job sold, there is the possibility that the cost of a job sold is exaggerated or faked to indicate that the job was undersold, thus greatly reducing or eliminating the compensation to the salesperson.  Because the world of direct or in-home sales is not understood or resented by most of the outside world including regulatory agencies, there are few resources available to the 1099/Independent Contractor Salesperson.

'"Fools rush in where angels fear to tread"?

Working on straight commission on a "one call close" is not easy. It can be even worse when reprehensible or outrageous acts are committed against the Salesperson. If the love of money is the root of all evil, here are some ways unethical sales managers or company owners steal from the salesperson:

  1.  Fabricated  "customer cancellations"  is defined by an owner or sales manager telling a salesperson that their deal has been cancelled by the customer/homeowner, when in reality there was no such cancellation taking place! While a certain percentage of deals sold will rescind or cancel, it should never be more than 3 to 10 %. I recall one case where a sales rep (who historically had a very low cancellation rate), experienced a cancellation every time he brought in a kitchen or bathroom sale of $10,000 to $35000. After three times in 2 weeks the sales rep inadvertently found one of the 'cancelled deals' in production and credited to the sales manager! 
  2. Fabricated  customer credit rejections can occur when a salesperson is told that a deal is "no good" due to bad customer credit. Of course a percentage of deals will be declined for credit acceptance, sometimes a sold deal will be financed by a different lender or even converted to cash with the salesperson never getting paid for selling the deal.
  3. Fabricated or falsified job costs  can be used to take what would have been a profitable job and turn it into an "undersold job". Sales commissions are frequently based on a percentage of profitability meaning when a job cost is "falsely inflated"  the salesperson is told that previously unknown factors such as "rotted wood" or other unexpected expenses have caused the job to be "undersold" thus denying or reducing any commissions on that job.

Beware of "SCAB" or illegal salespeople

"By their deeds you shall know them" Some thoughts stand the test of time and persist for generations. A "SCAB" was a term to describe non-union strike breakers who willingly cross a picket line of striking unionized workers. Although no such unions exist in the Home Improvement Sales profession, in some States/municipalities there are legal statutes or LAWS that require a Home Improvement Salesperson to have a criminal background check and HOME IMPROVEMENT SALES LICENSE. The District of Columbia and Maryland are two such places where it is a CRIMINAL, yes CRIMINAL offense to sell or attempt to sell home improvements without a sales license. Knowingly or unknowingly a newly hired salesperson will be issued leads and told to go out and sell without a license. Refusing to protect customers by ignoring licensing laws shows contempt for the sales profession as well as customers. Immediate gratification from selling one more deal as soon as possible without regard for anything else can be the cause of this conduct. Credibility and honesty are the hallmarks of any successful salesperson or sales team especially in the world of in-home sales. ****WARNING PLEASE DO NOT READ THE FOLLOWING IF YOU ARE EASILY OFFENDED****Seating an illegal. unlicensed home improvement salesperson at a sales meeting with licensed salespeople is comparable to to the sight of a pristine crystal punch bowl filled with a tasty beverage only to then be contaminated  by placing excrement  or fecal matter in that same punch bowl! Any organization that ignores this most basic decency probably has other "irregularities" as well.  While other professions or trades actively enforce compliance with licensing requirements, Direct or In-Home/Home Improvement Sales takes place at times when most agencies and offices are closed and in places away from public view. There have  been numerous  cases where an esteemed member of society such as a judge or federal law enforcement official will say at the end of a sales presentation something like...."that sounds OK but I need to check you out". (Think to yourself  if a person has been  allowed to walk through your house for 3 to 4 hours and you have not checked them out beforehand what kind of judgement is that?!) Where else would someone un-screened or not background checked be allowed in a secure area?! What area is more sacred than a private home? Any accomplished home improvement sales professional knows that it is imperative to show all proper credentials during a presentation, preferably at the beginning of a presentation. Documents such as a COMPANY LICENSE, INSURANCE and INDIVIDUAL SALESPERSON LICENSES should be proudly featured and explained. In many cases "an educated astute" homeowner will be asked if they have seen any other salesperson show the legally required licenses only to say...."No I/we did not see any but I'm sure they did have credentials". If you encounter this remember it is far easier to fool someone than to prove  or convince them they have been fooled.Since this type of selling takes place during off hours or evening/ weekend hours at a private location the quote : "Do not do under the cover of darkness (at night) what you would not do in the light of day (or public view)" is ignored and even laughed at by some large and small Home Improvement Sales organizations. Knowing that in many cases there is not an "even playing field" out there in the world means that a legal licensed ethical salesperson must be MUCH MORE SKILLED than their illegal counterpart. Class, decency and  excellence are qualities of a top notch Home Improvement Sales Professional!

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