I have just returned from a wonderful trip to Hilo, Hawaii. My younger sister lives there, and I flew out for a week to see her graduate from college with a degree in business. Having fallen in love with the island, she has decided to stay and open Aloha All Natural, and natural cleaning service servicing the big island of Hawaii. Having worked for me off and on for years, she knows the industry well and I am sure she will do great things. While there, I spent some time helping her with startup, since I have been there, done that and know the ropes.
The first thing I noticed upon arrival was the abundance of hand written signs tacked to phone poles: CLEANING LADY, $8 an hour call 555-5555. You could hardly pass a phone pole without at least 2-3 of these signs.
My sister scheduled an estimate for my final day that we had planned for me to do for her while she watched, so she could learn the sales process first hand. It was quite clear to me within the first few minutes that this woman clearly was looking for one of these $8 an hour housekeepers. My sister did not get the job.
The industry refers to these under-the-table workers as trunkslammers, and they frustrate me to no end. What do you get when you hire a trunkslammer? Cheap labor for sure. But what happens when this worker uses the wrong product and ruins all of your granite countertops? You will be the one footing the bill, as insurance would be far out of reach for such a low income worker.
What happens when that worker falls and breaks their ankle in your home? Contrary to popular belief, homeowners insurance will NOT cover such injuries. If the person was performing work in your home for money, that makes them your employee and workman’s comp insurance is the only thing that would cover them (I pay an average of $1000 a month for workman’s comp – not something individual homeowners are likely to consider for their cash employees.)
An $8-15 an hour cash worker is virtually guaranteed to not have health insurance of their own (although once again, even if they did they would not be covered) and they are not likely to have savings to cover their expenses during their recovery period while they are unable to work.
So what happens when your $8 an hour cleaner falls in your home and breaks their ankle? You get sued. It does not matter how nice your housekeeper is or how close you may have become, when faced with no income, no savings, and high medical bills, she will sue you and she will win. After all, you were her employer.