Workers Comp Help. I was just presented with new insuurance guidlines from a contractor who I primarily work with. I am a finish carp working as a sole proprietor under a DBA. This contractor I currently sub with is now requesting revised ins. along with all sub’s must carry workers comp. Looking for any advice in thia area
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Replies
it depends on what state you are doing business in..
some states allow individuals ( sole proprietors ) to carry WC, some don't
some allow officers of S-corporations to be covered , some don't..
some states have a form allowing sole prop's to opt. out of WC, which would let your GC off the hook..
your GC should have some, or all , of the info you need to comply
figured it out.....
trevpr
TP,
Sole proprietors, with no other employees usually aren't required to have Workmans Comp. You may even have trouble getting a policy.
You may be covered by the GC's policy, but as a GC, I don't hire too many subs without WC. Reason being, when I'm audited, my premium is increased to cover them. Comp is usually based on a rate per hundred dollars payroll. Rates will vary greatly by your location. I pay between $13-15/100, in MI & Wi. Being a trim sub, may lower your costs,as you aren't likely to be on a roof, etc.
I have comp, and no other employees. But I am incorporated, and pay monthly on an estimated premium. That premium is based on the payroll of having two employees. Basically I pay double my actual rate. Then after my audit, they refund the extra amount I've paid during the year. So in essence, I loan the insurance company a couple grand a year, just to get the comp.
Comp is usually beter coverage than, a disability income policy. Which, as a sole prop, would be an option for you, just to have some safety net. The disability policies are realy cheap, but you get what you pay for. Limited benefits, and at times a wait, before they will pay.
This is about my knowledge on the subject. A call to an agent would be advisable. THey will know the ins and outs for your situation, and locale. Good luck.
Brudoggie
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From:
firebird <!---->
7:29 pm
To:
TPCarp <!---->
(4 of 13)
53163.4 in reply to 53163.1
I have an interest in this thread, thought about starting a new one.
But if anyone can answer your questions with authority and validity, it will save me from doing so.
In NY State it is quickly becoming a requirement that even a sole proprietor carry WC, even though the law still states that it is not necessary. You don't have a lot of choice. I'm not sure who a policy will cover, especially a minimum type of policy.
The NYS scaffold law is reeking havoc on all insurance premiums through out the state, in particular WC. You may wish to contact your local represantative in Albany to see what he has done to fix this problem. Likely not much, as the insurance companies are one of the biggest lobbyists in Albany.
BUT, I digress!
If a second pair of hands are needed I either pay cash or have the homeowner hire the sub (ie electrical/plumber).
I can no longer purchase even GL if I am hiring subs. I must have WC, EVEN though the subs have it already. The reason...........they might be lying!!!
Having the HO hire the subs is one way around it, but you're (we) are gonna get our collective azzes reamed out here!
You have to raise your rates, suck the big lemon, and pay all those policies so the the Ins. Co.s can keep they're warm little friends in office in Albany. You have to work harder at selling your rates, because they are higher than alot of the other contractors. Heck, some one here suggested that less than 1/3 of all people in the trades are covered by WC.
It's a tough uphill climb from where I am!
I'd like to here what some of the sharp pencils have to add to this.
Yeah, I know, the attitude; I was born with this inate sense of fairness and justice............
Eric
I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
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From:
firebird <!---->
7:31 pm
To:
Mike Smith <!---->
(5 of 13)
53163.5 in reply to 53163.2
?????????????????/
C'mon Mike, his post is right on the topic.
Guess that's just me!
Eric
I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
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From:
Mike Smith <!---->
7:32 pm
To:
firebird <!---->
(6 of 13)
53163.6 in reply to 53163.4
will you guys stop ?
you're restarting this whole conversation in mid - thread ?
there's another one going with 16 responses to it .... sheeesh
Mike Smith Rhode Island : Design / Build / Repair / Restore
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From:
firebird <!---->
7:34 pm
To:
BRUDOGGIE <!---->unread
(7 of 13)
53163.7 in reply to 53163.3
Basically I pay double my actual rate. Then after my audit, they refund the extra amount I've paid during the year. So in essence, I loan the insurance company a couple grand a year, just to get the comp.
That's my favorite part.
Would any other service provider get away with that??
Eric
I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
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With A Hold That Causes Some Sensation.
Our state allows individual subs to be pre-qualified as artisan independents and not require insurance. Check with your state.
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
Mike Smith -"
it depends on what state you are doing business in..
some states allow individuals ( sole proprietors ) to carry WC, some don't...."
piffin - "
Our state allows individual subs to be pre-qualified as artisan independents and not require insurance. Check with your state."
Well yeah, that's very true, some states don't require WC for sole props or corporate officers (like NY) but some contractors require their subs to carry WC regardless of whether you're exempt from the requirement or not. While it hasn't come up yet as of this year we now require all of our subs even sole proprietors to carry WC. That protects us from ever having a sole proprietor come on the site with a helping hand who he or she might not have covered with WC.
So, while the state may say the contractor doesn't need WC the contractor he's looking to work for may require it anyway.
In fact morally I actually think all contractors should be required to carry WC. For the sole prop it's an insurance policy against him or her ever getting hurt on the job.And it puts the sole proprietor on an even level with the contractor who has employees as far as their costs are concerned.
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good points. I cover all my guys who don't have certificates - to protect the HOs just in case...
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
"In fact morally I actually think all contractors should be required to carry WC. For the sole prop it's an insurance policy against him or her ever getting hurt on the job."
Not so far as my insurance rep explained it to me ...
in PA I'm not required ...
was told I could buy it ... but it wouldn't be applicable to me.
I could pay ... I just couldn't collect on myself.
due for a review ... I'll check to see if anythings changed.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
was told I could buy it ... but it wouldn't be applicable to me.
I could pay ... I just couldn't collect on myself.
Not entirely true Jeff. I ran across a the very same situation. Erie and a few others offered to cover me. 9% for interior Carpentry, 13% for Framing and exterior. I was a sole Propietor at the time. Most agents don't know about it so they give out some very wrong info. Apparently you have been able to cover yourself in Pennsylvania for around 7 or 8 years.
Lots of paperwork involved too.
was told I could buy it ... but it wouldn't be applicable to me.
That's the way my WC is. The contractors that sub to require me to carry it. I pay about $800.00/yr. They audit me and if all the people I've 1099'd also have a policy in effect, they refund about $500.00. If I have a sub who I've 1099'd that doesn't have a policy in effect, I get billed for him and I pass it on. It's less expensive for everyone involved to carry their own policy, not to mention the coverage. If I'm injured on a contractor's job, then their WC should cover me. If one of my subs gets injured on my job, he should be covered, and so on with his help.Scissors cut paper. Rock breaks scissors. Paper wraps rock.
jerrald... SOME states will NOT allow sole props or corporate officers to buy WC..
i know this to be true from conversations with contractors in other states..
relying on their knowledge..
IE: every state has a different law regarding WC... and different ways of dealing with sole props & corporate officers..
one has to know the state law regarding this .. there is no blanket solutionMike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith - "jerrald... SOME states will NOT allow sole props or corporate officers to buy WC..
"
Well to tell you the truth I did know that that was true for some states (but I don't know which states) with regard to sole props but had not heard that with regard to corporate officers. I also know there is at least one state, Texas, that doesn't even require employers to carry WC. That sounds crazy and just doesn't make any sense to me at all.
As for corporate officer being able to opt out of WC coverage here in NY this case was cited to me as one of the reasons why that's risky to allow your subs to do that risky.http://www.law.cornell.edu/nyctap/I02_0149.htm.
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Jerrald,
That case in itself should make every contractor in the country, not just NY contractors think twice about why every single worker needs to be covered by WC or an equivalent insurance. Everyone talks about taking a waiver if you are a corporate officer, well here in NY you can take that waiver and leave it in the bathroom where it will be better used. That case is a wake up call."Don't take life too seriously, you are not getting out of it alive"
Yup a wake up call it sure is. It woke us up.
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jerrald...i'm with you.. i've always expounded that..
i absolutely believe that EVERY worker should be required to be covered by WC.. wether they're sole prop.. or chapter S-Corp officer or LLC .. no exceptions..
however , for some reason some states still insist that sole props CANNOT be covered by WC...
now... could you run your business without any one-man band Sole Proprietorships as subs ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike Smith - "now... could you run your business without any one-man band Sole Proprietorships as subs ? "
Well, yeah we do. We have a few one and a half man bands that we have used in the past but most of our work with subs involves other contracting companies and I define companies as companies of people. The one man bands don't have the scheduling flexibily that the small (3-5) or mid-size operator has.
Admittedly though I know of tons of contractors who depend upon the one man bands. And some of those contractors, not all but still a good portion of them, I think work with those one man bands because it a situation they can exploit and take advantage of. They are essentially getting temporary low cost employees they can use when they want and then throw away and they in turn are dodging having to pay for WC on them or any employees since they technically don't really have any employees.
A couple of times a year I hear a story of some contractor who lays off all of his employees only to hire them back as Independent Contractor. That contractor will often hand the story to those now ex-employee-neo-indendent-contractor types that this new arrangement will allow them to make to make more money! What B.S.! Makes my blood boil. It's just an excuse or temporary way out of the bad management situations those contractors have worked themselves into.
It always hard for us too when we run into one of those contractors who wants to possibly hire us. Because our legitimate rates are often anywhere from fifty to a hundred percent higher than those "Independent Contractors" they been using and exploiting.
I was just thinking the other day though that as I/we have moved further and furthe up the contractor food chain to work on the higher class projects over the years I see less and less of that exploitation. Yeah it's still there but there is less of it as you get closer to the top.
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jerrald.. i read your link.. good case law
then i went on line to check on a few things.. almost impossible to find out what the various states require
then i called my agent and inquired
here's what i understand about RI WC Law
1) Sole Proprietors CANNOT cover themselves under WC.. they can cover their employees, but NOT themselves
2) Corporate Officers can exclude themselves...and according to the person i talked to.. since GL premiums are paid by payroll.... sole props and corporate officers will be assessed premium ( cannot exclude ) and will be covered by GL..
wether or not they have excluded themselves from WC
3) In my Certificates of Insurance that i have on file for my subs... there is NO WAY to determine if corporate officers have included themselves or excluded themselves
i left a message for my agent to call me so i could explore this further.. but naturally , all he can do is tell me what the law is.. the state legislature is the only one who can amend the law
punk law... every worker in the US, SHOULD be covered... but i wonder what the percentage of those acutally covered is.. i bet it's less than 1/3 of all workersMike Smith Rhode Island : Design / Build / Repair / Restore
Now, here in the unfrozen North West, (South west to me) things are a little different.
In the land of Socialized Medicine (yea, right!), as a sole prop., by law I am required to have WC. It is a Crown Corporation and it bills by income. I am off the radar screen, but really, I SHOULD have it to protect my family...just like I carry liability insurance.
I'll probably end up registering for it this year.Quality repairs for your home.
Aaron the HandymanVancouver, Canada
Mike,
When I started out, I had a hard time getting comp. I was the sole employee of my S-corp. My agent ended up getting me a policy based out of my Michigan office, as he could not get my situation covered in Wisconsin. As an officer of a Wisconsin corp, I am allowed to opt out of coverage. I choose to stay with it, as it is good protection for my self & family. The catch is that I have to pay a premium based on having 2 people employed. Then get rebated at audit time. This drives my one-man show overhead up into the range of a company with employees. Many of my competitors, have gone the route of "employee-subs". What a racket. I just hope they never have an accident. That comp premium will look cheap, in the face of a wrongful death lawsuit, or the likes. It can be tough to compete with these guys, that have alot lower overhead. I try to use, my being fully insured ,as a selling point. But in this world where the $$$ rule, it doesn't always work. I suppose, I'd rather not work for a customer, who doesn't care about my safety, anyway. Right? Brudoggie
bru.... i'm covered on our WC , also..
i'm trying to figure out why Rhode Island won't allow sole props to be covered.... or better yet.. why they won't REQUIRE sole props to be covered.. it's the main weasel hole for "independent contractors " to NOT be covered
hey... we've been blowing cells all day too !Mike Smith Rhode Island : Design / Build / Repair / Restore
TPCarp,
In most states you can opt to cover yourself. Most agents don't know about it and don't research it because what sole Proprietor wants to pay 11% of his income plus a disability premium to an insurance company? Few if any ever ask about it.
If you live in a state where you can not cover yourself it can be tricky. When I first started out in P.A you could not cover yourself. And, they wouldn't write you a policy unless you had an employee to cover. I finally just said screw this and told the agent I had one part time employee making $5,000 a year. Then I paid my wife every once in a while. Never came close to $5,000. At audit time I got a refund.
That way i had a policy, all the builders were happy, the Insurance company was happy and it didn't cost me an arm and a leg.
Recently New Jersey has started to insist that every single person on a job be covered. So, if you're a sole proprietor and don't have WC, the GC or builder gets whacked at the year end audit. When I did end up covering myself I just added it to my price as a cost of doing business.