Brother offered me a decent proposal

[Bearblastbeats]

My brother just offered me $20 a hour to come back to his company full time installing flooring as a subcontractor and pay my own insurance as well as in house office tech guy, due to my IT and CAD skills. He then stated her could work me up to $25 and then eventually more after a number of years.

On the other hand, I've worked in engineering firms for 5 years and my last gig in a firm paid $19 with full benefits. 

I now plan to go back to college and obtain my BS in architecture,  which is less than 2 years.

I all ready obtain an associate in architecture engineering and have made decent money w8th that.

What would you do?

[Zikoris]

I don't think I'd want to work with family. I've seen those arrangements go belly-up so many times, and permanently fracture families. Like giving/lending/cosigning, it just introduces a dynamic into the relationship that I would not want.

[G-dog]

I am not sure your brother's offer stacks up financially if you have to pay your own insurance or lose other benefits. What other savings/advantages do you get with your brother?

[BlueHouse]

if this is as subcontractor it means you're also responsible for taxes  self  employment and personal.  thas hard work for what will be less than min wage after tax

[brewer12345]

Better than an indecent proposal...

[G-dog]

Better than an indecent proposal...

Especially from a relative....

[ShortInSeattle]

Better than an indecent proposal...

LOL I was thinking the same thing. :)

[brewer12345]

Better than an indecent proposal...

LOL I was thinking the same thing. :)

<cue banjos>

"Squeal like a pig..."

[YoungInvestor]

I'd do the math to make sure it's actually better, because it sounds like you may be making less money after the move, all things considered.

Then there's the whole set of problems that working with family may or may not bring...

[paddedhat]

As a FIREd, long timer builder, I have seen this happen all too often, and strongly recommend that you avoid this mess. First, depending on the state and local tax burdens, you will be losing no less than 45% of your check to local, state, and federal taxes, plus social security (which is roughly 15% since you pay the employee and employer portions), medicare, unemployment, and more. Second, believe it or not, it's flat out illegal to do what you're being offered. The IRS has a very specific set of laws regarding who is, and isn't an employee. Basically, if you show up at your family's business every day, and receive direct supervision as to where to go, and what to do, you are an employee. If you use their tools to get the job done, you are an employee. OTOH, If you own a floor covering installation business, have a presence in the community as such, and are know as a contractor who works for all who seek your services, you are a contractor. The giant red flag here is that you are proposing to do the work of a subcontractor, who traditionally is paid unit rates (by the yard of sheet goods, sq. ft of hardwood installed, etc...) while being paid an hourly rate as a "subcontractor". Now, if you make a good faith attempt to pay your taxes in this case, you are viewed as the victim here. The IRS can, and has, inflicted a great deal of pain on those that do abuse employees in this manner. I have had two of my contractors (insulation and sheetrock subs) go through tremendous pain battling  the IRS after the received notices that they owed hundreds of thousands in unpaid taxes and fines for illegally classifying employees. Finally, as another poster stated, at $20/hr once you pay your legitimate taxes and your own health insurance, you WILL be earning less than minimum wage. Also, in the event of a serious injury on the job, your brother will not only be paying the bills out of pocket, but in most states he will be paying huge fines for not having proper workman's comp. coverage on his employee. Your brother's proposal is common, and it may never come back to bite either of you in the ass, but if it does, it can get extraordinarily ugly.

[ScienceSexSavings]

Better than an indecent proposal...

LOL I was thinking the same thing. :)

<cue banjos>

"Squeal like a pig..."

HAHAHA oh sweet Jesus, did a James Deen reference just happen on MMM? If that's not what you were going for, we'll just pretend I never made this post...

[dandarc]

I wouldn't totally trust advice here saying "you'll be earning less than minimum wage" because at $20 / hour, you'd have to be spending a lot on equipment and such to make that true.  Your brother may be playing with fire here regarding employment classification, or may not - so long as you know the deal being a 1099 contractor, make your own decision.  I personally prefer being paid on a 1099 basis - the key is for you to do your homework and be darn sure to pay any taxes you owe - don't invite problems by not sending in your self-employment taxes.  Paying you hourly does not necessarily mean that you are an employee vs an independent contractor - it has to do with the balance of control - contractors can be told the what to do, but not the how to do it.  This is a pretty big gray area.

I personally would avoid working with family simply to avoid working with family.  Consider all benefits and costs, of course, but the only 100% guaranteed additional cost to being 1099 vs W-2 is the other half of self employment tax - 7.65% or so.  In this case, sounds like you need to obtain "insurance".  I would assume that means liability insurance - presumably you'll be working in customers' homes, and need to cover any damage you might do.  You'll probably want to purchase good long-term disability insurance - that and health insurance are how self-employed folks often cover the workers comp end of this.  This may be expensive - you are doing physical labor here, so research this before you decide.  I haven't researched unemployment for my personal situation - we just have a lot of savings to get us through if it comes to that.

Any way, be sure to factor in all costs before you decide.

[dandarc]

I will say this - $19/hr with full benefits is definitely worth more than $20 on a sub-contracting basis.  If you have the option of staying at that job, I'd need something like $30+ on a 1099 basis to even think about it.  Unless your brother is able to swing you a lot more hours than the engineering firm - if he'll send you all the work you want but the engineering firm is only giving you 15 hours a week, then that goes into it as well.

Many many factors to consider here.

[Timmmy]

I work with/for family and it hasn't been a problem for me.  However, not everyone can do it.  Make sure you have good clear communication and you'll be fine. 

But the pay sounds like a pay cut to me.  Depends on the hours and the level of benefits that you get now, but it seems like a big pay cut after taxes. 

[Bearblastbeats]

Update:

I just survived my first week back at college since 5 years ago that I graduated. I am not so sure if I'm overwhelmed or have just obtained the case of the fuck its. My brother did re-offer me $25 an hour to go back to work for him full time, as a sub, and more or less manage the other workers and so on. To be honest, its not that bad of work, especially now with all these new machines and tools to make work easier. But, the buck doesnt stop there. He did mention that I could eventually, through more time, since I've worked with him my whole life really, I could make more (he says nearly like $100 an hour) or whatever I call my worth at.

I guess I don't know where I want to go from here. I really just wanted to make more money but this new investment is costing me more time and more money. The worst part of it all would be after graduating, finding a new job hoping they offer me more money, dealing with the long hours and stress of clients, and the constant anxiety I have because I don't feel I'm a strong designer.

I guess the only thing I can do at the moment is just tough this out a month at a time.