1099 Not Insured

Mr. D

why not w2 'em and consider 'em part-time. since you want to pay the premiums anyhow?

maj

That's what I can't figure out Mr. D!
Perhaps Grumpy is........ dare I say.........trying to "cheat" the system!

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Grumpy

How am I trying to cheat any system by 1099ing them? I'm volunteering to pay their premiums, they are getting a tax document by the very definition of 1099... How is there any cheating going on?

Regardless if you think I am cheating or not, which I am not, you are all totally missing the point. The insurance company is cheating you. They are charging you for coverage that does not exist if you 1099 anyone.

jmic

You can skirt around things for so long but let one of them 1099ers get crippled or killed on the job, and when the proof comes out that they were really employees, you can kiss your business good-bye.

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Joe

maj

ummm.... By treating them as employees, but not withholding taxes, not paying in unemployment, not being covered by work comp.

Insurance companies do not charge anyone for work comp coverage unless you have them listed. Grumpy, if you list these part timers that you are 1099ing as employees, then you are cheating the system.


These are your very own words Grumpy.

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Grumpy

Ummm I thought you knew how to read. I have already stated this once or twice, and those were not my words but I will state it again since you don't seem to know how to comprehend what you read.

I am paying their insurance, WC & GL. However even though the insurance company is taking my money for coverage for any working for me who does not have their own policy, 1099 or w2, they will not cover anyone that is not a w2 employee. Therefore YES they do charge for EVERYONE at audit time and everyone who has worked, w2 or 1099, are all declared. I will pay for anyeone who does not have their own coverage, but only w2 employees will be covered.

I am sending them tax docs so they should be paying their own taxes. These are independants and not employees. They work for me as neded, a day here and a day there, and they work for other guys like me as needed. That is an independant by the very definition of the word.

I am not cheating the system one bit in any way at any nook and cranny you care to examine. Just because you say it doesn't mean it is true. Just because you neglect to read what I type doesn't mean I haven't already stated the facts... and because I know how to cheat the system doesn't mean I do cheat the system, if I were cheating the system I wouldn't be paying $900 a MONTH in WC.

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Choose to flame me all you want, you are still missing the point. The insurance companies are cheating US.

Grumpy

BTW taking something I said... ... in an unrelated post and using it out of context against me is a politician move. Perhaps you should run for office. I do remember saying this and I do not deny saying this. But that doesn't mean I do follow this practice. I'd love the money I'd save but I wouldn't be able to sleep at night... and please take strong note to my final line in that quote "It's cheating and it is very criminal".

maj

Do what you like Grumpy, I was only trying to offer my advice and the facts that I know. I've been there... done that.

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maj

The thread was titled "Workmans comp". How is that unrelated to your thread?

How could it be out of context when I used the whole text? I didn't just take parts of your post (like Finley does), I used the WHOLE thing!

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maj

How are these two different?

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maj

I do not list other independents on my policy. They MUST have their own, seperate policy and I require a certificate of insurance from them. I do the same as you Grumpy. I have several other independents that help me out, as I do for them also. We exchange certificates once a year.

If you want to pay for their policy, that is fine, nothing wrong with that, But my whole point is that it must be seperate policies. You cannot lump other independents onto your policy & expect your insurance company to cover them.

You said yourself, these guys are independents. They should have THEIR own policy. You can pay it for them if you prefer.

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Debookkeeper

I am going to tiptoe in on this one - as I choke on all the testosterone . I am just sincerely wondering how it is even cost effective to pay WC and GL for another subcontractor? I mean.. if they are only working for you a day here and a day there, how does that even finanically justify it? If they are working for others as well, you are also paying the insurance so they can work for others? I am pretty sure the shortest term for GL and WC is 6mnths? Maybe 3? Just wondering.....

Deb

maj

That's what I've been trying to figure out too Deb. Like it was said earlier...... Why not just put 'em on payroll and W2's? Estimate the wages expected to pay and let the audit work it out in the end. That way he will know for sure they are covered. Why pay for something you already know is worthless?

It's kinda like a customer wanting a new kitchen. I will bill you for $20,000 but you don't get any cabinets or countertops for that.

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Debookkeeper

That is our policy as well. I send a friendly note to all new subcontractors stating that a check will not be issued until I have their W-9 information, a current certificate of insurance, blah blah blah. Like I mentioned in a previous post, the GL has to be at least 1 million or the auditor nabs us for that as well... That is also why I have that subcontractor agreement for guys with no employees who don't have WC. Years back I had an auditor looking at one of my subs invoices, and he came across ONE invoice out of a years worth, who listed a "helper". (it was the guys cousin who was plumbing with him for a few days) and because my solo guy didn't have WC - the auditor informed me he could make us liable for it. Thank goodness I was my charming self with him Seems no matter which way you turn someone is trying to you - without a kiss first, none the less!

Gordo

I have a plumber (a one man show that legally in the state of Va. does not have to carry WC). I sub his services regularly. At the end of the year at audit time, I declare his total labor paid. The company is then charged the WC plumbers rate per one hundred. Example: Plumber sub contract wages=10,000. WC per hundred rate =$7.50. 10,000x$7.50=$750 MY company must pay in WC at audit time.

Legally, my company does not require WC (we have less than 3 employees). I CHOOSE to carry WC because as others have said it only takes one mistake for an employee to become a parapalegic. Kiss your business good-bye. I want my right hand man covered, just like I would want to be covered if I was working for him.

I am not accusing anybody here, but the reason WC is so F;ed up is because of people circumventing the system. This results in higher rates for those that are legit.

Another thing, I agree with Grumpy as far as WC being a "racket". I think the mafia is alive and well in this system.

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Debookkeeper

Are the insurance laws different for every state? are you saying you elect to pay this workmans comp on this plumber at the end of the year or are you required?

Gordo

Here is where it gets tricky. Va. law does not require WC on companies with less than 3 employees. We are 2 employees, not including subs (which are considered employees if they do not carry WC).

The general contractor is ultimately responsible for all employees (sub or full time). This is where the general public homeowner does not understand the risk involved in this business.

As far as states differing in their requirements, I only know Va. WC.
I am required to pay because I have chosen to be covered (even though legally I do not have to be covered). Kinda like health insurance.........You legally are not required to have it, but when you need it..........its to late to go sign up for it.

IMO,if you have any subs or employees you should be covered regardless of loop holes. The peace of mind is priceless. I still think WC is a "racket", but you have to have it.

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bmartin

Why not have them get there own policy and invoice you for the premium?

jmic

Why not just do things on the up and up and hire employees? You'd have better control of your jobs.

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Joe

Shellbuilder

Makes you wonder what our lawmakers are thinking when asset requirements for C license is nearly nil and yet you can self insure 3 human beings just because you pass a test. Considering also the scenario of dumb ass w.c and G.L. insurance companies insuring subcontractors who have no state registration. I run into this constantly with carpentry.concrete, tile , brick, palster etc. It's no wonder companies like Zurich stopped writing for G.C.s here a few years ago.

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