Workers Comp

[jimbob]

Can anyone give us a good lead on reasonable workers comp ins? We were quoted around 26%. Tn based tree service

 

[skwerl]

Sounds normal. W.C. laws vary by state, but here in FL you only need it if you have 3 or more employees. W.C. is one of the biggest reasons there are so many owner-operator businesses, most cannot afford to grow. A business with 4 employees that follows every financial law cannot price their work competitively and stay profitable. Either stay small or get big.

 

[jimbob]

We have similar laws but with a five employee limit, I have a bigger client that wants the coverage before they will do business and they will not sign an agreement to commet

 

[skwerl]

Local companies I've worked for in the past had rates from 30%-45%. No wonder they could only pay the employees $10-$15 per hour.

IMO clients that attempt to push you around like that typically don't stop pushing once you've jumped through hoops and outlayed thousands of dollars in order to get their work. They may or may not provide you with enough work to justify the huge additional expense, but I'd bet that they will not be your favorite client. Luckily in my area there is enough work to enable me to pass on jobs like that.

 

[vharrison2]

Jimbob, I am also from Florida...so can't offer any tips on TN companies, but good luck and welcome to the site.

Skwerl, the law in Florida is a little more specific to our industry, as it is classified as "construction" under Florida law. Under the construction classification, if an employer has more than 1 employee he must carry Workmans Compensation Insurance. If the company is a corporation; 3 officers may choose to be exempt, and in a partnership, no more than 3 partners can be exempt. Florida Statutes 440.02 (15) (b) 2, 440.02 (15) (c) and 440.02 (17) (b) 2 dictate this.

 

[Diesel JD]

Vharrisson and Skwerl....suppose, you are a legit company...contactor's license , insured everything...... and own your own company, and you are helped by 2 or three other tree guys who really aren't employees...just get paid for their work, sort of like a contactor. Must you have worker's comp? This is how a lot of tree work is done in the G-ville area. there are only the real big tree companies and the small owner operated units...Are they legit operating thsi way?

 

[skwerl]

I spent over a year attempting to get an exemption card and kept getting stonewalled at the WC office because I did not fit into either Construction nor Landscaping categories. Three different people refused to accept my application and told me I was already exempt by law since I wasn't in construction or landscaping. I went to my insurance company (Sihle Insurance, specializing in small to medium business insurance) and they could not sell me a WC policy if I wanted one. I finally gave up on the entire matter and simply ignored any reference to WC since. IMO it's like throwing money down the toilet anyway.

JD, I work as an independant subcontractor for small, owner-operator size tree services. I am not an employee.

 

[rebelman]

In Arkansas it's two employees, counting the owner. And the owner is not covered. I think it is one of the most ignored laws I've ever known. I do all my own climbing, so, yes it's stay small or go real big. Also the subcontracting angle is covered in red tape. I'm thinking interns. That may be the way to go--unpaid interns, like Howard Stern, or Bill Clinton!

 

[Stumper]

JD, I work as an independant subcontractor for small, owner-operator size tree services. I am not an employee.

And the Superskwerl upholds his claim of subcontractor status by carrying his own liability insurance and providing his own equipment.

 

[Diesel JD]

Of course...your own equip. and liability insurance is basic for a legit business unless you happen to be the employee of a legit biz. That clears things up a little thanks

 

[vharrison2]

Vharrisson and Skwerl....suppose, you are a legit company...contractor's license , insured everything...... and own your own company, and you are helped by 2 or three other tree guys who really aren't employees...just get paid for their work, sort of like a contactor. Must you have worker's comp? This is how a lot of tree work is done in the G-ville area. there are only the real big tree companies and the small owner operated units...Are they legit operating thsi way?

The law is very specific. Sounds like the "helpers" are indeed employees; Fl Statue 440.02 (15) a defines an " "Employee" as any person who receives remuneration from an employer for the performance of any work or service while engaged in any employment under any appointment or contract for hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes but is not limited to, aliens and minors."

So, the answer is yes, in Florida they are required to carry WC and if they are not, they are not operating as a "legit" company.

 

[vharrison2]

I spent over a year attempting to get an exemption card and kept getting stonewalled at the WC office because I did not fit into either Construction nor Landscaping categories. Three different people refused to accept my application and told me I was already exempt by law since I wasn't in construction or landscaping. I went to my insurance company (Sihle Insurance, specializing in small to medium business insurance) and they could not sell me a WC policy if I wanted one. I finally gave up on the entire matter and simply ignored any reference to WC since. IMO it's like throwing money down the toilet anyway.

JD, I work as an independant subcontractor for small, owner-operator size tree services. I am not an employee.

skwerl, how long ago did you try to get the exemption, because the law changed only like two years ago. Our industry is definitely in the construction category.

Here is another thing, when you are hired by another contractor and you (skwerl, the sub-contractor) get hurt on their job, they (the contractor that hired you) are legally liable for your injury. That is why a contractor asks the sub-contractor to show proof of WC.

 

[vharrison2]

And the Superskwerl upholds his claim of subcontractor status by carrying his own liability insurance and providing his own equipment.

That doesn't make him legit in Fl, he must either get the exemption or carry WC.

 

[BlueRidgeMark]

Vharrisson and Skwerl....suppose, you are a legit company...contactor's license , insured everything...... and own your own company, and you are helped by 2 or three other tree guys who really aren't employees...just get paid for their work, sort of like a contactor. Must you have worker's comp?

I don't know about worker's comp, but that arrangement can get you in deep doo-doo with the IRS. They are very aware of people who try to get around tax witholding and employee taxes by pretending that the employees are "subcontractors". They have strict rules about who qualilfies as a sub and who is an employee, and - please hear this part - it matters not one bit what you CALL them, or what they call themselves, or what you think at all.

If these "subcontractors" fit the IRS definition of employee, and you are not treating them as such, you could face CRIMINAL tax evasion charges. As in, Federal prison time.

At the very least, you will be hit with heavy fines.

If these guys "subcontract" with nobody but you, it's very likely that the IRS will tell you that your subcontractors are really employees, and it's time to cough up a big wad of dough. There are other factors, and it isn't cut and dried, so you'd better start doing some research. Talk to a tax lawyer. You may already be in deep doo doo.

Yeah, you might get away with it, and you might get away with it for a few years or a long time, but it really isn't worth the risk. They will make you very unhappy if they catch you.


Again, please understand this - it does not matter what you think. The IRS will decide if they are employees based on their own rules. They won't ask you and they won't care what you think about it.

 

[treeman82]

In NY if you are an officer of the company you don't need to be covered by comp. If you are an employee however, you MUST be covered by comp. There is no 4 employees before having to get comp. It's 1 employee and you have to get comp. Also if let's say I wanted to use the skwerl as a subcontracting climber, even if I didn't have any employees, I would still need comp in order to pay him.

 

[chicken89]

ok, as an employee's perspective. if i get hurt while working for you- under the table or "over", i am coming to you as an employer to pay for any bills incured thru my injury. my understanding of WC is that it covers medical bills in the case that injuries happen. i understand that WC is expensive, but isn't it more expensive if you do not have it?
i may misunderstand WC, isn't it better to have it and not need it then need it and be screwed for not having it

 

[Tree Wizard]

workmen's Comp not only covers medical bills, but also lost wages, rehabilitation and retraining for a different job if need be.

 

[Diesel JD]

I'm not sure worker's comp comes anywhere near to wage replacement....I think maybe about 50-75% of whjat you were amking...better than zilch I guess. More expenisive not to have it...maybe, maybe not, guess it's a gamble.

 

[stihlatit]

In Canada 95% of wages.

 

[flyinmechanic]

Workmans Comp.

Hey if it helps, My Stump Grinding Business is categorized and Incorporated in the state of Florida as in the"Timber-Industry" not construction but (Destruction would be OK though!!!) I would think a tree service would also.