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Workman's Comp Work Around

yojimbo2's picture

Workman's Comp Work Around (post #210744)

GC in California.  Small business, shunted by my size to "State Fund" for Workman's Comp coverage. 

If you pay $29/hr or less, its $30/hr more, so your rate is now $59/hr not including taxes.

If you pay $30/hr or more, it drops down to $11/hr, so your base rate is $41/hr.

 

Instead, have your workers sign up with Labor Ready.  They do it online and then go in for an interview.  Labor Ready takes care of all the paperwork.  You pay Labor Ready, you get Labor Ready's discount-I will post that info when I find that out.

 

You let your General Liability coverage holder know that you are using labor ready.  Tell them your projected wage cost for the year, and they will add coverage for that. 

 

When you pull the permit, check the box that basically says you do not have employees and don't need workman's comp. 

 

Still doing the math on all this.

 

Hopefully we will get universal healthcare in this country and all this nonsense will go away. 

Ill have to look it back up (post #210744, reply #1 of 5)

Ill have to look it back up but I am pretty sure the feds can get you anyway. the irs will use a set of guidlines to determine if someone is your employee or not. its a fairly straight forward series of questions on the irs site. 

my suggestion would be to avoid answering them with the bias you will naturally have (to want to avoid an employee classification) and answer then with the thought in mind that your in court vs disgrunteled employee.

Some of these issuse may fall under state regulations, temporary labor or day labor companies may be something that you can do in cali...

Temp. agency. (post #210744, reply #2 of 5)

From the original post I'd say that Labor Ready is a temp agency. Just as in any buisness the workers are employees of the agency, which pays taxes, workers comp. etc. You pay a premium to the agency, they pay the workers who are their employees. This is perfectly legit from all stand points. In fact you can get workers directly from the agency. Usually you can't hire a worker away from the agency without waiting a certain time or paying a fee to the agency. Temps are used in almost all buisnesses not just construction.

Yeah, I think the Feds are (post #210744, reply #3 of 5)

Yeah, I think the Feds are happy so long as the taxes are paid & workman's comp rules followed.  What they don't like is you hiring "independent contractors" who may or may not pay their own employment taxes, etc.


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

yeah guess so. would you (post #210744, reply #4 of 5)

yeah guess so.

would you still hire someone specific through a temp agency and keep them under that status for an extended period of time? say more than 6 mnths.

i would just be apprehensive about that.

Work around = move to Texas. (post #210744, reply #5 of 5)

In Texas (the one star state) almost any worker can be an independent contractor. So when they get hurt they get screwed as well. The problem I've had (in Calif.) is that there is a minimum premium on workers comp. With a small payroll I've ended up having to pay to make up the minimum at the end of the year. Right now I don't carry workers comp. I've been able avoid hiring anyone, by using licensed subs. I've also been prepared to go to a temp agency if necessary. I don't think it would save any money though since their workers comp rates based on the trades might be lower but not enough to make up for their markup. I encountered the situation where it was cheaper to pay a higher wage than the higher premium. I paid my guy more. Contractors have been busted here in Calif. trying to fudge their hourly rates to lower there comp premiums. That's not a good work around.

Health insurance is no substitute for workers comp. It usually doesn't cover on the job injuries. It will cover the employee for injuries but it won't protect the employer from liability for the costs.