Building Manager Review Issue 9 2014- The True Cost of Cleaning

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Issue 9 – February 2014
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Welcome to the February edition of the Building Manager’s Review.

In this edition I am focusing on cleaning and the true cost of cleaners.
Cleaners are the backbone of every building. Bad cleaners or cleaning can devalue and add costs to your building whilst good cleaners can add value and save you money.
You have invested heavily in your asset so why would you skimp on cleaning and maintenance? Regular and good cleaning can prolong the life of many facilities in the building so it makes sense to have them cleaned and maintained regularly and properly.
It is important for all residents to feel comfortable in their own home and part of this comfort comes from the common areas being clean and tidy. Common area cleaning usually comprises of:
  • routine cleaning – general daily duties e.g. foyer, lifts, toilets, recycle, waste collection, etc
  • supplementary cleaning – high use areas e.g. gymnasium, toilets, showers, pool area, or emergency cleaning, pressure cleaning of pavements, picking up dog feces, etc
  • scheduled cleaning – car park vacuum, window washing, carpet steam cleaning, floor polishing, etc
  • additional cleaning – New Years Eve, building wash down, additional window cleaning, etc
  • litter patrol – litter collection throughout the complex, graffiti removal, sweeping of leaves, etc
  • Attendant/resident services – supervision of residents moving in & out, padding lifts, opening loading bays, postal deliveries, key collection, allowing access for telecom or internet providers, disposing of dumped furniture, etc
  • Associated services – weeding, pool cleaning, cleaning up after workers, changing of light globes, etc
The Building Service Contractors Association of Australia states “Revenue for the 2013-14 year is expected to sit at around $4.3 billion. The most recent ABS Census recorded 115,062 people in commercial cleaning (63 per cent part time) with another 15,880 in domestic cleaning (79 per cent part time) with additional significant numbers of people working as house keepers. The cleaning sectors rely on large number of part time and casual employee with much work especially in commercial cleaning taking place out of business hours. Low pay and high turnover of staff remain a problem for people engaged in the sectors and there are many in the industry who enter due to low barriers to entry”.
There are still many workers that are paid below the minimum wage. Owners corporations who engage companies based on “the lowest price” need to understand they may be doing so because the cleaners are underpaid.
Cleaning is a very physical job and can also be mentally draining. Some cleaners can walk up to 15 km per day covering the grounds of a complex. Other cleaners push or pull bins (that weigh 30kg) over 50 meters to the street for council collection. Contract cleaners are a significant group of low-paid workers in Australia. Cleaning and cleaners are looked down upon by the general public, but without cleaners the general public would not be clean.
I hope the following helps clarify that cleaning a building does not come cheaply.
Jamie Killorn – Director, K&S Building Management Services
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The good and the bad

Bad cleaning makes a building look tired and old. Bad cleaners will not report any building issues they have noticed nor will they deviate or operate outside their scope of works. Bad cleaners are not proactive and can be lazy.

Good cleaning adds a sparkle to the building; keeps it fresh and can bring a smile to your face. Good cleaners understand what it takes to keep a building clean, they have a thorough knowledge of cleaning and cleaning chemicals and have excellent time management skills. Good cleaners are proactive and keep building management informed of all activity throughout the building. They understand and can hear when a pump is failing or has stopped, they can generally find out who is making a mess and what levels require more cleaning. Good cleaners greet residents and their guests and know who is abusing visiting parking. And most of all they understand how to manage the cleanliness of a building.

But, all the above comes at a price. As in every industry there are companies that are very cheap and some that may be perceived expensive (some are expensive). Every building is different and unfortunately cleaning is often tailored to suit the budget, not the building. Often a building that does not look clean is a reflection of the budget, not the cleaners. You can’t expect a cleaner to clean a 28-story building in 4 hours.

Many executive committees still believe cleaning and cleaners come very cheap. They also underestimate the time it takes to thoroughly clean a building. I have been involved in with an executive committee (EC) who scoped the cleaning schedule then went to tender. A contractor was awarded the contract based purely on price. Within 2 months the scope was added to with no extra remuneration. When the cleaners could not maintain the building to expectations they were cautioned. I had to explain to the EC the cleaner’s duties had changed and they could not possibly clean the complex they way the EC wanted in the time allotted.

Many “cleaners” believe they are experts because they have been cleaning for 2 years. There is an art to cleaning and not everyone is a good cleaner. Cleaning knowledge, experience and training go a long way and must be rewarded accordingly.

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What is the true cost of a cleaner?

As with other industries there is a minimum wage full-time, part-time and casual cleaners must be paid. The award is based on the Cleaning Services Award effective July 2013. This award has 3 levels of cleaners – Level 1, Level 2 and Level 3. The award includes information about penalty rates (over-time), normal hours, superannuation, holidays, types of employment (part-time, full-time, etc), allowances (such as toilet cleaning, travel, uniforms and refuse collection), entitlements and much more.
Fair Work states the minimum wage for a Level 1 cleaner starting work not before 6:00am daily (Monday to Friday) and working a 38-hour week is $664.60 per week. A Level 2 cleaner – $687.60 per week and a Level 3 cleaner – $724.50 per week.
  • A Level 1 cleaner is basically a cleaner who does nothing outside the general cleaning duties – basic cleaning. No interaction with contractors, no light globe changing, no pool cleaning, no pressure cleaning, no chemical ordering, no maintenance issue feedback, just basic cleaning – vacuuming, dusting, toilet cleaning, etc.
  • A Level 2 cleaner is a cleaner whose duties include level 1 cleaning plus ordering and distributing cleaning products, carpet cleaning, and may assist in the provision of on-the-job training and is responsible for quality assurance of their own work and consistently meets the expectations of their employer.
  • A Level 3 cleaner takes on the duties on a level 1 and 2 cleaner plus undertake more specialty tasks such as carpet cleaning, toilet and chemical control and ordering, changing of light globes, admit and partially supervise tradespeople or other contractors such as admitting a locksmith and taking him the appropriate area and lock, supervising removalists, ensuring lights and appliances are turned off where necessary, reporting security breaches, reporting maintenance issues, ensuring the building is secure plus more.
Based on the above information, experience and research executive committee members and residents in apartments said cleaners should fulfill the duties of a level 3 cleaner. That means cleaners that are engaged to clean in apartment buildings Monday to Friday should be paid a minimum of $724.50 per week by their employer.
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Hours of work, type of work, allowances and penalties

There are many classifications of work, rates and pay. Ordinary hours, Saturdays, Sundays, over-time, penalty rates, allowances, broken shift, shift work, night shift, afternoon shift, early morning shift all need to be considered when cleaning in any employment.
E.g. If garbage collection is at 6:00am on a Monday that means the bins go out the night before (on Sunday) or early Monday morning. This means the cleaner needs to work on a Sunday for at least 2 hours or start an hour before collection on Monday to place the bins on the street. From 5:00am to 6:00 this is classified as penalty rates – normal rate of pay plus 10%. Sunday rates are double time

Hours

– Full-time – 38 hour week Monday to Friday

– Part-time and casuals – not less than 2 hours in larger complexes (300 – 2000 sq meters). 3 hours for areas 3000 – 5000 sq meters and above 5000 sq meters 4 hours at a minimum
Rates

– Monday to Saturday – Time and a half for the first 2 hours and double time thereafter

– All day Sunday – Double time for all hours

– Public Holidays – Double time and a half for all hours

– All time worked by full-time employees outside the rostered hours (unless worked on a Sunday or Public Holiday) – Time and a half for the first 2 hours and double time thereafter

– All time worked by part-time employees in excess of 7.6 hours per day, five days per week or 38 hours in any week (unless worked on a Sunday or Public Holiday) – Time and a half for the first 2 hours and double time thereafter

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True cost of a cleaner

The below table is based on the wage of a level 3 cleaner wage

Salary $37,674.00

Superannuation Component (9.25% of Salary) $3,484.85

Payroll Tax Component (5.5% of Salary + Super + leave loading NSW only) $2,072.10

Workers’ Compensation Component (0.82% of salary) $ 308.93

Long Service Leave Component (4% of salary) $1,507.00

Severance pay (0.20% of salary) $ 75.35

Annual Leave (9.19% of salary) $3,462.24

Annual Leave Loading (1.56% of annual salary) $ 587.70

Personal/carers & compassionate leave (3.85% of annual salary) $1,450.45

TOTAL EMPLOYMENT COST TO THE EMPLOYER $50,655.17

% salary on-cost 26.00%

This costing does not take into account any office overheads, on-site mobile phone, ongoing training or uniform allowance (a uniform allowance is a requirement under the Cleaning Services Award)

Clean Start (a collective agreement between cleaners in Melbourne) states their cleaners are to be paid a minimum wage of $47,424 per year, at a cost to the employer of approximately $59,756.76 per year. Many other cleaning companies also pay $2.00 /hr extra over the award.
Cleaning companies can have a profit margin ranging from 5% to 50%, but generally it is 10% to 20%.
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The law

Under section 20 of the NSW Workers Compensation Act 1987 a building owner can be held accountable for costs if: “A contractor’s worker is injured and the contractor engaged failed to take out workers compensation…where a contractor fails to take out workers compensation and one of his workers is injured, then in certain cases the ‘principal (e.g. the property manager) shall be substituted for reference to the employer’ (i.e. the property manager or owner incurs the costs).”12
E.g. If company ABC is engaged to clean a complex and he subcontracts the work to company XYZ and company WXY have no workers compensation or public liability, company ABC plus the owners corporation may be liable in the vent of an incident.
Have a question you’d like answered or feedback on this or past Reviews?

Just get in touch – info@k-sbms.com.au

K&S BMS has now been working in the strata sector for 30 years. Our services are designed to assist owners corporations with the smooth running of their buildings. Duties we undertake include: by-law enforcement, coordinating repairs and maintenance, assisting with building defects issues and claims, coordinating fire and essential service compliance, managing various maintenance contracts, liaising with owners and tenants in the day-to-day operation of their building, and waste management.
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