Union plumbing shop scores win with move to commission pay

About five years ago, Tom Teynor joined Colorado-based Bell Plumbing and Heating as its CEO. The company was nearly 100 years old and had been a union shop practically since its founding, so it was bound by contracts to hire only union members as technicians and pay them a high hourly wage.  

Yes, but: “Union contractors can’t compete in today’s market,” Teynor told Homepros. 

• “Most residential service contractors shoot for about a 50 percent gross margin, so if you sell a job for $100, you should make $50… to buy trucks, pay insurance, etc,” he said. 
• “What was happening for me, and what I think is happening to a lot of union contractors, is they’re not making 50 percent gross margin,” he added. “They’re making 30, 25 percent — something like that — and they’re having a hard time competing with the marketing spend of PE-backed firms and the margins of sole proprietors.”

Between the lines: Having to pay a high hourly rate whether technicians were out selling, doing repairs, or sitting in meetings was a problem, according to Teynor. 

• “Technicians who can help customers and sell leave the company because they can make more money on a commission plan,” he said. Workers producing less revenue were incentivized to stay.  
• In 2024, calls fell off by 20 percent, and Teynor thought he’d have to close the business. 

What’s happening: Teynor reached out to his union contact, Rick Allen, with the United Association, and with the help of union lawyers, developed a commission-based pay structure.

• Allen explained to Homepros that the union has both national agreements with boilerplate language and local collective bargaining agreements with specific terms, and that rules can be customized by adding a Schedule A to the national agreement.
• Taking advantage of state and federal laws that exempt overtime rates for people earning over 50 percent of their compensation from commission, they devised a Schedule A specifying that technicians would earn a percentage of what they sell, plus a percentage if they perform the work, along with a three percent “quality performance bonus” at the end of the month if they don’t have any callbacks. (Workers are tracked both by hours and by sales, with union benefits paid based on hours worked.)

What they’re saying: During non-job hours, including mandatory meetings, techs “get paid time-and-a-half the highest minimum wage in the area, which is Denver’s minimum wage, so it’s roughly 29 bucks an hour, which is still pretty good money, right?” Teynor said. 

• “But it’s significantly less per hour than I was paying before,” he added. “However, techs are now earning more money when they sell solutions a homeowner needs.”

Go deeper: Allen explained to Bell’s techs that “option one is, we do this commission-based contract, or option two, they shut their doors December 31.” “The hands voted to do it,” he said.

• “Now, as my revenue goes down, my costs go down; and as revenue goes up, my costs go up,” Teynor said. 
• “And universally, without exception, every single service tech in this company, once they signed this agreement at the end of 2024, their W2s were higher in 2025,” he added. 
• “They all made more money… It’s been a win-win-win. Customers won. We’ve won. The unions have won. The techs have won.” 

What we’re watching: Both Allen and Teynor believe their model could be adopted by more contractors and make union membership more attractive. “I would love to spread this thing all over the country,” Allen said. 

• Currently, he noted, his union, which covers the U.S. and Canada, represents over 120,000 plumbers (approximately 35,000 service plumbers), roughly 167,000 pipefitters and welders, and more than 46,000 HVAC and refrigeration technicians. 
• “You want to try it out? Give us a year, and we’ll sign an MOU and let you out of that agreement in the year if it doesn’t work,” Allen said. “Don’t be afraid of the union… It never hurts to have a conversation, and maybe we can surprise you.”