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Workmans comp.

Discussion in 'Business Fundamentals' started by PhilFromErie, Jul 24, 2012.

  1. PhilFromErie

    PhilFromErie Senior Member
    Messages: 263

    Has anyone found a legal or arguably legal way to pay other people to drive my trucks and not pay workman's comp?
  2. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    Yes, Have them form their own corp. if you pay a corporation you are not responsible for WC. Of course they are required to provide you with proof of proper insurances including but not limited to WC. As a owner of the corporation they are not required to carry WC on themselves. They have to jump though all the paperwork hoops though and I would imagine that they would want more money to cover the cost of insurance/taxes and fees.

    Or you could give them all a piece of your company, as owners they are not required to have WC, but again then you Need to have better corporate records, pay for K-1 returns and have to share corporate dividends, etc.

    Or you can put your big boy pants on and act like a legitimate business and treat your employees like people. One injured employee's medical expenses from an on the job injury and lost wages will wipe out any money you "saved" on WC. If it's a long term disability you could be paying them for the rest of your life.
  3. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    X's 2.......
  4. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Beat me too it!...X3

    It really doesnt cost that much.... just a % of payroll

    Just another cost of doing business.........
  5. PhilFromErie

    PhilFromErie Senior Member
    Messages: 263

    I do carry it, I should have worded my original post diffidently. How do people get away with not carrying it?
  6. Meezer

    Meezer Senior Member
    from Indiana
    Messages: 291

    First of all, laws vary from state to state.

    They would need to be Independent Contractors. You pay them, they their taxes, etc., They would need to get a waiver from your state exempting them from WC. As far as using your equipment, you can lease/rent it to them
  7. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    This can come back to bite you in the a$$ right about where your wallet sits.

    IF they cannot produce the proper paperwork the IRS, insurance company, DoL, etc will declare them employees and look to you for back taxes/insurance cost, etc.

    as I said before

    IF you do not provide YOUR insurance company with a certificate of insurance on all your subcontractors they'll hold you liable at audit and you will have to pay those fee's. They require a 1099 anyone who is not a corporation and that throws up fireworks to a insurance auditor they will dig for coverages now.

    I've had insurance auditors ask to see checks and invoices to vendors with names that sound more like surnames then corporate entity's to assure we are not trying to slide one by them. We track used purchases made by check very carefully for that reason.

    Remember most common lease agreements require the leaser to insure/indemnify the equipment so they will need commercial auto coverage naming you a a loss payee to qualify as a sub contractor.
  8. plowin-fire

    plowin-fire Senior Member
    Messages: 186

    In South Dakota we are not required to have WC, but like others said, one accident and you and the business may be headed south...
  9. Rat_Power_78

    Rat_Power_78 Senior Member
    Messages: 175

    Some people dont seem to know about it, or (more likely) just dont care. You can get away with anything until you get caught, right?

    My family has been in business for 30+ years and work comp (well, all insurance really) is my dad's biggest complaint. You pay a considerable amount of money for something you hope you never need. But, on the chance you do need it, its way better to have it than to risk loosing everything if someone would become disabled.