Way Around Worker's Comp?

nadonailer

It was suggested to me recently that a lot of Contrs are getting out of the worker's comp mess like this: Since owners can opt out of workers comp, you start an LLC and make your employees 'owners'. Then you lease them to your S corp company. You do have to get them disability policies , but it is still supposedly cheaper than wc. Anyone tried this? Workers comp is just so bloody expensive with everyone having to pay carpenters rates now....

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"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

tnt specialty

That's quite the "old news".....

That and variations have been going on here in Colorado for the last 15+ years that I know of.....

It's illegal and unethical....

There is some interest lately though, to curtail it....come down on the dirt-ball employers...

Double-A

Ya, this is perfect, until someone has to actually file a workers comp claim. But, even then its all good if you have a good district attorney, cause you're all going to jail for fraud and will get free medical care anyway.

Please note, the 'you' in the above refers to no one in particular, especially nadonailer.

Yes, workers comp is expensive, but so is losing your business because some ninny shot someone with a nail gun or fell off a damned ladder.

There are other problems associated with the above, not the least of which is some states do not allow exemptions, some allow them, but limit the number of exemptions, while others allow them, and limit the number, but only allow them for a certain percentage of ownership and above.

By the time you educate yourself enough to be able to pull this off 'legally', you might as well have gone to college and become an accountant or an attorney.

Your clients pay for everything. If you're selling on price, then you're probably competing on price, which means you're probably exposing your clients and yourself to civil liability action resulting from an injury while on the job.

Congratulations, you've just dragged an innocent family into your conspiracy to defraud.

If you're charging your clients for WC, and everything is above board, then you can pass a WC audit with flying colors, possibly qualify for an experience discount, and be more competitive while still protecting your clients the way you should be.

Do you really dislike your clients enough to expose them to such headaches and grief? Over a new tile back splash?

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Susan Betz

Look into a leasing company. Our worker's compensation bill was cut in half when we went through a leasing company. They take care of payroll too. All the headaches of HR administration, gone for a small weekly fee.

The beautiful thing is, if you have a worker's comp claim, it doesn't go on your certificate, it goes on the leasing company's. So you're always clean.

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Fences of Distinction, Ocala, FL
http://www.fencesofdistinction.com

bujaly

Who is your leasing company?

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Susan Betz

We use Southeast Personnel. We've been very happy with them. I know there are other good companies out there.

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Fences of Distinction, Ocala, FL
http://www.fencesofdistinction.com

Grumpy

Do you really want to be a cheater? Do you ever expect to grow your company past a rinky dink operation? Are you already past the rinky dink operation?

I ask because if you want to be known a cheater, that's on you. If you ever expect to grow your business past you and a helper or two you will start to appear on the IRS radar. They don't like cheaters.

I posted this on my myspace and show it to customers from time to time so they know what all goes into achieving the lowest bid. If you want to be a cheater it might just be your bible... http://blog.myspace.com/index.cfm?fu...ogID=345402631

Forry

Who would wan't to avoid WC? I like knowing my guys are covered if there's an accident. Everyone's pretty careful and all, but I don't think I'd let'm touch a tool or climb a ladder if they couldn't get help if they got hurt.

Ed the Roofer

We can all dream on how nice it would be to find the magic loophole, but the reality is, if the insurance company and the state board of workmans compensation knew what you were doing, would the potential incidents still be covered?

Unless one were willing to bet their entire accumulated possessions on doing something so unethical and with such a high risk factor, this kind of thinking needs to be ejected as soon as thought about.

Work comp rates suck, but the alternative sucks even more.

By the way Grumpy, I just added a 2 kudos comment to your blog article awaiting approval.

Ed

Grumpy

Amen Ed.

Learn how to do business. Mark your costs into your price. And learn how to sell high price instead of low price.

When roofing subs contact me offering to do new construdtion shingling for $35 a square I quickly distance myself from those people. I know it just can't be done legitimately and they have to be cheating something, and yes it's usually the taxes and insurance. I don't want crap like that on my job sites because if something happens and they are cheating, guess who foots the bill... Me!

Also cheating insurance is fraud and carries potential jail time. If I am going to go to jail it's going to be for millions, not thosuands.

nadonailer

I figured as much! No, I'm doing fine the way I am, just looking for new ideas, that's all.... Thanks for the input, all

__________________
"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

GSE

The is no short cut to WC, your ether in business, or you just another hack, with no funds, to operate a business, and an accident waiting to happen.

In_Mexifornia

Can't you just pay for one employee, and if/when any one of your employees gets hurt, that employee would be the one you are covering? Just a thought.

Forry

DO IT RIGHT! If you're cheating, you're cheating all of us! Quite ing around and be legit already, it's the cheaters who give us a bad name!

Floordude

WC is calculated here, on a % of your payroll. How people get nailed, is they mislabel their employees to cheat the system, but have them included in the payroll, and then 1099'ing them and visa-versa. An insurance audit, if they are thorough, will nail your coffin.

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**Education is the key to success. Learn more, earn more.**
http://www.AustinFloorguy.com

TigerFan

My only problem with this thread is that it is often the "innocent family" that is driving this problem.

They get three quotes: $15k, $13k and $9k and go with the uninsured, no WC, $9k guy 90% of the time.

Screw the "innocent family" that cuts through the companies doing the jobs correctly. They deserve injuries every time.

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http://www.bayoucontracting.com

Driftwood

Picture this, A 30 yr old guy paralized for life with a wife and 2 kids.

How could You even post this garbage?

buildenterprise

Speaking of worker's comp, any recommendations on carriers?

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nadonailer

Well, this is not going where I intended - I am not trying to cheat the system. I am a long time, well established, successful contractor who has always done things by the book. I was simply asking for opinions on an idea I had not come across before! If I could legally and ethically put $10 -20k in my pocket I would be foolish not to, right? Just checkin in with my fellow experts

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"History does not long entrust the care of freedom to the weak or the timid”.
Dwight D. Eisenhower

C.C.R.

How much are you guys paying for WC? I'm paying $500.00 per year. (although it is just me). I'm just wondering is it the same for the primary owner and a typical employee.

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