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Work comp. KANSAS

Discussion in 'Introduce Yourself to the Community' started by JMHConstruction, Oct 31, 2011.

  1. JMHConstruction

    JMHConstruction Senior Member
    Messages: 770

    Hey guys, I've got a small sidewalk crew that I'm trying to grow until I can start building up into a bigger company. This is my second year of snow removal but first year with a crew. I am a sub to a larger company and all my guys are also subs. They've all filled out 1099, but because I've always been a one man business, I don't have (and cant really swing it in my tight budget due to lack of work) workers comp. insurance. If they are all my subs do I still need it? If so, can I make them sign something that states I am not responsible? Thanks for your help.
  2. Chineau

    Chineau Senior Member
    Messages: 446

    Go on line and check your state law as it applies to your business each state or province will be a little diffrent. Odds are you do and there is a lawyer some were looking to sue and screw you, think c.y.a.tymusic
  3. mpgall26

    mpgall26 Senior Member
    Messages: 228

    someone just told me about Paychex and i spoke with them last week. They do all paroll, pay taxes,workers comp is no up front cost. They calculate comp per pay period. meeting with them this week and so far sounds like a good small business option. Check it out
  4. superdog1

    superdog1 Senior Member
    Messages: 255

    Ok, to try and keep it simple: A true subcontractor is someone who has their own business in the same (or vary similar) field. According to the Feds, 70% of their income has to come from a source other than you, so if they shovel sidewalks or run a slow blower on their own accounts and only help you when you get behind, they are a true sub.

    If the only place that they are getting a source of income, 1099 or not, is you? then they are your employees. If their regular job is working at a Wendy's drive thru and they only help you shovel snow and don't help anyone else do that? they are your employees.

    This subject has been discussed over and over here, and like any other law/rule, there are many opinions as to who or what is correct. I was an insurance agent for 19 years before I got the bright idea to be a Landscaper/Snow removal guy. That being said, I have dealt with this many times. In most cases, it starts out with a small guy who is trying to get ahead, needs the workers but knows that if they purchase workmans comp, it will price them out of work when you try and cover the cost of it in the bid price.

    An accountant (some, but not all) will tell you that it is Ok to just 1099 them, as it isn't his/her behind when the **** hits the fan. The other reason is that they only understand how a 1099 works as far as paying someone and they are not specialists in insurance. I had clients that used 1099's for years and never had an issue, as it takes just the right combination of things to happen for it to ruin your day.

    Most states use the same rules as the Fed's do for deciding if you have an employee or a sub when determining if you should have workmans comp insurance or not. Here is a link to a page that has 20 questions on it. By answering them, you can decide if you have a sub or employee:

    Here is a link to the IRS website with the same type of thing on it:

    Most of the guys that got burned and fined had a situation like this:

    You have 5 guys that work for you doing snow removal. They only work for you during the winter months and are laid off every Spring. When you hired them, you explained up front what the deal was and all of them agreed that this is seasonal work and they shook hands and started working. The 2nd big snow storm, one of your crew slipped and fell on a sidewalk. He was in a lot of pain, so you drove him to the ER for treatment and dropped him off. When going through the admittance process, the nurse asks him how this injury happened? He replies "I was shoveling snow at work and I fell".

    The nurse than asks for the WC policy # so she can start the claim process. The hurt worker calls you and asks for the #? you tell him "I don't have one, as I don't need it. You are a sub-contractor" and you hang up. At this point, if your worker agrees that he is a sub, the hospital will make him sign a paper that says he is responsible for all the bills relating to this injury, he gets fixed up and life goes on..............or does it? Maybe? If he is a man of his word, he will pay the bill and everything is good?

    The second ending could be different, and is usually the one that happens. Once the sub realizes that he is now responsible for the $1500 bill if he signs the paper, he tells the nurse "This is crazy! it happened at work and my employer is the one who needs to pay this" Since you don't have a WC policy # to use, they treat him and refer it to their billing dept. Some times you will get lucky and the hospital will give you a chance to pay the bill and they go away. Most times they will call you and ask again for the WC# and when you don't have it, they tell you "We'll get back to you"

    The people in the billing dept deal with this all the time and know exactly who to call! our good old friends at the state WC bureau. They then assign an investigator to it and you get a phone call from them asking you to set up a time for an audit. The WC person will then decide whether or not you have an employee or a sub after looking at your books. You obviously know what happens next if they determine you have an employee.:realmad:

    Another scenario is when you hire someone and then after watching their performance, realize you made a mistake by taking this person on. They either get pissed off at you for firing them, or, short on cash, they apply for unemployment. This can also have some disastrous results, as the same thing happens in the first example I gave you. It just comes at you from a different place. The fines and harassment end up costing just as much, because once one state or Federal agency gets involved, they notify all the others and the train just gets longer and longer...........:yow!:
  5. Thomas.Creation

    Thomas.Creation Member
    Messages: 64

    Good stuff.
  6. TwoBrosLawn

    TwoBrosLawn Member
    from 53223
    Messages: 89

    well written