There are many benefits of hiring a contractor, as well as working as a contractor but we are asked time and time again about capping hours and what it means for the client as well as the contractor.
What is hours capping?
Contractors decide to hire themselves out for work on either a day rate or an hourly rate. Hours capping comes into play when a contractor works on an hourly basis.
Hours capping is when a decision is made by either the client or the contractor. Or in the best situations, a decision is made together, at the outset of what the maximum or expected hours will be per day and per week to complete the work set.
We have seen many situations where a decision has not been made on hours capping that always leaves at least one party unhappy.
So, if you aren’t setting capped hours, what do you need to consider? And are there positives and negatives for both parties when setting them?
The positives of hours capping for architecture and interior design contractors
As a practice, you will have submitted a proposal for a project with a set cost and time to complete the work. You may then have taken on a contractor(s) to complete this work. By setting capped hours for the contractor, you will have the ability to budget effectively and be more likely to complete the project within the cost that you proposed to your client at the outset.
From a contractor’s point of view, if their client has told them from the beginning of the project what the capped hours will be they will then know what is expected and give them the ability to manage their work-life balance better.
The negatives of hours capping for architecture and interior design contractors
Contractors expect to get paid for every hour they work. A popular reason for many contractors is that even if their work is a little less frequent they can make up the shortfall by working a lot of hours in each contract they take on. If the hours are capped then they may not make as much money as they had been hoping.
From a client's point of view, if capped hours have been set and the work has not been completed it can be very frustrating if a project deadline is looming. A contractor has the right to say no to working extra hours. If they do agree, a client will need to ensure they are paying for the extra hours which they may not have taken into account when they set the original budget for the project.
Our advice for hours capping
Hours capping is important to help manage the expectations and the relationship between a client and a contractor. Our advice is:
Always discuss capped hours from the outset- it is important this is discussed at the interview and offer stage in particular.
Contractors should never be asked to work additional hours if they are unpaid unless agreed in advance or time is given back.
Contractors are not entitled to benefits or paid annual leave, so being paid by the hour is an expectation of most contractors.
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