Workman's Compensation

Status
Not open for further replies.
goldstar said:
You can call it whatever you like.
Click to expand...

I can call a hot dog a hamburger if I like, but that will add confusion when interacting with a purveyor of such things wont it? Now you are sort of right that it depends on the context we are using the term. When most of us talk "employee" we are talking about subcontractor or not and tax status. The NYS workers comp board does use a different definition of employee for workers compensation purposes.
 
jaylectricity said:
I suppose you believe that I have to pay the rental of a scissor lift out of my pocket because the customer needs it and I should just have a scissor lift at my disposal.
Click to expand...

i believe nothing of the sort.

if the customer doesn't pay for everything, then
either you are engaged in a hobby, or you are going
to go broke.

my perception, upon first read, is that you were a
sub for a GC, who has a customer. the GC was saying
you needed workers comp so they didn't have to pay
workers comp on you personally while you were on their
jobsite, or for that matter, under contract to them in
any capacity, on site or not.

you aren't an employee, you are a subcontractor.

take it out of this trade. look at it differently. general
motors subcontracts parts and assemblies for it's vehicles
to other business entities. it's a contract for goods or
services, just like the one you are involved in.

GM is *not* responsible for workers comp of employees
hired by a battery supplier for their electric cars.

neither is your GC responsible for your business costs.
if the state licensing you are working under doesn't require
you to self insure with workers comp, as mine doesn't, then
you don't have to insure.

if your GC is getting hosed for workers comp for you personally,
that is between his insurance, and him, unless you want to pay
his agreed insurance costs for him.

why is it hosing? simple. if you get hurt on one of his jobs, rest
assured that his workers comp provider will not pay your costs.

if you don't have workers comp on yourself, which is a separate
policy from workers comp on your employees, you are SOL.
 
electrofelon said:
I can call a hot dog a hamburger if I like, but that will add confusion when interacting with a purveyor of such things wont it? Now you are sort of right that it depends on the context we are using the term. When most of us talk "employee" we are talking about subcontractor or not and tax status. The NYS workers comp board does use a different definition of employee for workers compensation purposes.
Click to expand...
I understand your point and it's well taken. Many of the GC's and companies I have dealt with use the terms as I described and I've come to understand what they were talking about.

here's something I found on the web and I thought it may clear up some of the confusion :

https://www.irs.gov/pub/irs-regs/subcontractorsfaq&a.prn.pdf
 
jaylectricity said:
I've been on my own and by myself for about a decade now. I've never had Workman's Comp. I considered getting it at one point until my insurance agent told me that I wouldn't actually be covered in case of injury, but I'd just have the certificate to give other businesses to show that I had it. It was something like $500 a year.

Only occasionally have I ever had to deal with contractors who asked me about it, but it's come up twice in the last two weeks. Their contention is that if I don't have workman's comp they have to pay an extra percentage of what they paid me to their own insurance company. My contention is that I don't include workman's comp in my overhead expenses, so they are already saving that money when they pay me for work. If I were to get workman's comp I would have to start charging more. But in my estimation, the one or two contractors that are asking for it should be the ones to foot the bill, not the homeowners who don't need it.

What's the best way to explain this to these contractors? Should I do the math and see if spreading out $250 to each contractor throughout the year saves them money and makes me extra money? One of the contractors is good for maybe $7000 a year, the other one is closer to $20,000. Maybe I should just have them pay the premium upfront? If there's anybody who could ask for something like that without coming off as a scam artist, it would probably be me. I prefer honesty. Or should I just add an extra $100 to their jobs all year and consider it a profit after I've paid the workman's comp for them?
Click to expand...

So if you get injured while working on the GC's project, they will file a workman's comp claim on your behalf as if you were an employee of their company. Is this correct? In all my years in the construction business I don't believe I have ever seen this arrangement, let alone any type of workman's compensation paid out for a sub contractors injuries.
 
stevenje said:
So if you get injured while working on the GC's project, they will file a workman's comp claim on your behalf as if you were an employee of their company. Is this correct? In all my years in the construction business I don't believe I have ever seen this arrangement, let alone any type of workman's compensation paid out for a sub contractors injuries.
Click to expand...

Yeah, that's kind of my point. It seems like everybody basically agrees that the insurance company wants to collect a premium from the GC for using me, but wouldn't pay out if I got hurt on his/her job.

It's an interesting thing. That's why I started this thread to get an idea what everybody thought of this whole arrangement.
 
jaylectricity said:
Yeah, that's kind of my point. It seems like everybody basically agrees that the insurance company wants to collect a premium from the GC for using me, but wouldn't pay out if I got hurt on his/her job.

It's an interesting thing. That's why I started this thread to get an idea what everybody thought of this whole arrangement.
Click to expand...


i had one contractor a while ago, insist that i must have workers comp to do work
for them. i didn't have employees at the time. they didn't care. they said there
was a lot of work available.

so, i bought a policy. state fund. no employees, no payroll.

after a year, the gross revenues from that big account? the gross wasn't as much
as the premium on the workers comp.

dropped the customer, and cancelled the policy. that is when it got interesting.
workers comp called and demanded an audit.

i said i had no payroll, and there was nothing literally, to audit. no financial transactions whatsoever.
a nasty little asian lady with bad english yelled at me about fraud, and hung up.

never heard from them again, got a bill in the mail from workers comp for an additional $750 for
additional premiums. this in addition to what i paid initially. a minimum charge, as it were.

i paid it. it didn't matter. the little asian lady told the state license board i was non compliant, and
they suspended my contractors license. even with all bills paid, i tried unsuccessfully to get my
license reinstated for almost nine months. at the time, there was a staffing shortfall at CSLB,
and my requests went unanswered, until license renewal time, where i paid my renewal fee,
and my license was renewed.

i'm a big fan of state fund. yep, love workers comp. if i had a potential client demand it without good
cause, i'd get another client.

my experience was that i paid about $2,000 out of pocket for the privilege of working for free.

YMMV. good luck.
 
Fulthrotl said:
i'm a big fan of state fund. yep, love workers comp. if i had a potential client demand it without good
cause, i'd get another client.
Click to expand...

In 1985 I went out on my own and started a one shop with no employees. Back then the State of Colorado ran the workman's comp insurance program. You could sign up for a WC policy with no employees that did not cover you (the owner) for $99 a year. Everything was fine until a few years later a business of some sort, that had the same no cover clause policy, successfully sued the State of Colorado with a workman's Comp claim on his or her self. The next thing you know the same WC policy jumped to $1500 a year. It's all been down hill from there.
 
Fulthrotl said:
i had one contractor a while ago, insist that i must have workers comp to do work
for them. i didn't have employees at the time. they didn't care. they said there
was a lot of work available.

so, i bought a policy. state fund. no employees, no payroll.

after a year, the gross revenues from that big account? the gross wasn't as much
as the premium on the workers comp.

dropped the customer, and cancelled the policy. that is when it got interesting.
workers comp called and demanded an audit.

i said i had no payroll, and there was nothing literally, to audit. no financial transactions whatsoever.
a nasty little asian lady with bad english yelled at me about fraud, and hung up.

never heard from them again, got a bill in the mail from workers comp for an additional $750 for
additional premiums. this in addition to what i paid initially. a minimum charge, as it were.

i paid it. it didn't matter. the little asian lady told the state license board i was non compliant, and
they suspended my contractors license. even with all bills paid, i tried unsuccessfully to get my
license reinstated for almost nine months. at the time, there was a staffing shortfall at CSLB,
and my requests went unanswered, until license renewal time, where i paid my renewal fee,
and my license was renewed.

i'm a big fan of state fund. yep, love workers comp. if i had a potential client demand it without good
cause, i'd get another client.

my experience was that i paid about $2,000 out of pocket for the privilege of working for free.

YMMV. good luck.
Click to expand...
IFAIK this is entirely run by the State(s) and will have some differences from state to state. And we all hear about how well state run programs work in your State here all the time;)

Here there is two major political parties when it comes to State government. City people (those with population over 10k) and rural people.
 
kwired said:
IFAIK this is entirely run by the State(s) and will have some differences from state to state. And we all hear about how well state run programs work in your State here all the time;)

Here there is two major political parties when it comes to State government. City people (those with population over 10k) and rural people.
Click to expand...

yeah, it was state fund, not a private firm.

no private firm would issue a policy where there was no chance of a claim.
it wasn't worth their time and trouble.....:? whatever.....

you did make my day with your break point of 10k between city and rural people.

within 125 miles of me lives one of every six people living in america.
i don't think we HAVE any places with less than 10k people.
 
Fulthrotl said:
yeah, it was state fund, not a private firm.

no private firm would issue a policy where there was no chance of a claim.
it wasn't worth their time and trouble.....:? whatever.....

you did make my day with your break point of 10k between city and rural people.

within 125 miles of me lives one of every six people living in america.
i don't think we HAVE any places with less than 10k people.
Click to expand...
I have to go about 40 miles to get to a city with over 10k people, and another 40 beyond that city to get to the next closest one over 10k.

I can drive west from where I live all the way to the Wyoming border (about 340 miles) and never come to a city over 5k people.
 
Fulthrotl said:
dropped the customer, and cancelled the policy. that is when it got interesting.
workers comp called and demanded an audit.

i said i had no payroll, and there was nothing literally, to audit. no financial transactions whatsoever.
a nasty little asian lady with bad english yelled at me about fraud, and hung up.

never heard from them again, got a bill in the mail from workers comp for an additional $750 for
additional premiums. this in addition to what i paid initially. a minimum charge, as it were.

i paid it. it didn't matter. the little asian lady told the state license board i was non compliant.
Click to expand...

I think you made a mistake in not agreeing to the audit.

The person that you talked to probably wasn't qualfied to take down any information and even if they were you would have been required to furnish a signed audit. By signed I mean a click of the mouse saying that all statements are true.

It sounds like a big deal but you probably could have done the audit on-line in less than 15 minutes and saved a lot of hassels. If the audit is on paper it would still take about 15 minutes but you would need a postage stamp ( and a real signature).

I think the reason they want an audit is that people tend to be more honest when filling out paperwork they have to sign than just talking on the phone. Plus they have a singed record of any statements made just in case there is ever a claim made against them.
 
growler said:
I think you made a mistake in not agreeing to the audit.

The person that you talked to probably wasn't qualfied to take down any information and even if they were you would have been required to furnish a signed audit. By signed I mean a click of the mouse saying that all statements are true.

It sounds like a big deal but you probably could have done the audit on-line in less than 15 minutes and saved a lot of hassels. If the audit is on paper it would still take about 15 minutes but you would need a postage stamp ( and a real signature).
Click to expand...

i didn't refuse the audit. agreed, that would have been a mistake.

they required the audit be at the place of business.
i explained there was nothing TO audit. we never made
it to scheduling a time to view nothing that didn't occur.

they said they would have to inspect my payroll records.
i explained there were no payroll records, as i have never
had employees, and never written a payroll check, and only
had pulled the policy as it was a contractural requirement
for one customer, and i was discontinuing the policy, as the
customer wasn't worth the premium.

then she said fraud was a serious crime, and hung up the phone.

the person who talked to me was at least qualified to know how
to file a notice of noncompliance with CSLB. i'm sure of that.
 
Fulthrotl said:
they required the audit be at the place of business.
i explained there was nothing TO audit. we never made
it to scheduling a time to view nothing that didn't occur.
Click to expand...


I "think" what they wanted to see was your tax records for the last quarter or the last year or the time that you were covered.

There are a lot of people that do try to cheat on workman's comp and for some big bucks.
I knew of a commercial roofer that was working a 50 man crew with only about 20 of them listed as employees. If I remember correctly the workmans comp rate for that type of work was around 28% of payroll. It's really hard to cook the books and hide that kind of money. Either the IRS gets you at audit or workman"s comp does.

If they get a look at your banking and tax records they get a pretty good idea if your are cooking the books.
 
growler said:
I "think" what they wanted to see was your tax records for the last quarter or the last year or the time that you were covered.

There are a lot of people that do try to cheat on workman's comp and for some big bucks.
I knew of a commercial roofer that was working a 50 man crew with only about 20 of them listed as employees. If I remember correctly the workmans comp rate for that type of work was around 28% of payroll. It's really hard to cook the books and hide that kind of money. Either the IRS gets you at audit or workman"s comp does.

If they get a look at your banking and tax records they get a pretty good idea if your are cooking the books.
Click to expand...
Then they should have asked for tax records IMO. Only way you are cheating in that regard is if you are not deducting anything you pay to any so called "employees", or maybe they find you are paying someone under a 1099 and that raises concerns over whether or not that person should be covered by a workers comp policy, even if they are otherwise a legitimate subcontractor to you.
 
Status
Not open for further replies.
Top