Workman's Comp on "as needed Helpers" vs Employees

Tom Dunlap said:
Hiring workers through a temp agency may not be legit in every state. I'm in Minnesota and it worked for me.

All of the crew had to fill out job applications from the temp service. They reported to work for me just like normal. At the end of their pay period they would call in their hours and mail or drop off their time sheets.

The temp agency paid them and billed me for wages plus 30%. This covered all employment taxes and workers comp.

Considering that WC at the time was around 20% or more this was a deal!

I got a bill from the temp agency that I paid like any other bill. What a relief to not have to do payroll everytwo weeks and then collect/pay taxes. etc. That all saved me time too.

This was 100% legit and above boards. Before signing up with them I talked with my accountant and the state WC bureau.

WHen I talked with my accountant he did some rough numbers and told me that it cost me much over 30% to pay the crew as employees. Savings all around.

The people were supervised, hired and fired by me too. I had no unemployment liability either.
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If I go over 5 employees in the future, I will do that. We have retirement, complicated PTO, FMA, and other benefits once I hit 5 in CA. If it was simplified somehow, and didn't involve 6 different agencies, I wouldn't complain. Don't get me started on IRS, county, state fine and child support withholdings. HR is such a headache. I understand why it all needs to be there, I just wish it was streamlined.
 
dmonn said:
Here are a couple of quotes. One from the National Law Review and the other a quote from the bill.

The PRO Act would expand the definition of “employee,” adopting the California “ABC” test to exclude most workers from exempt independent contractor status. The PRO Act would also require employers to act at their peril, even if acting in good-faith; employers found to have mistakenly classified their workers as independent contractors would be in violation of the NLRA. As most employers know, the distinction between an employee and an independent contractor is inherently fraught with uncertainty. Placing the onus on the employer to get it right at the outset is likely to result in employers “erring” on the side of caution, often contrary to the intent of the individual and the employer.

https://www.natlawreview.com/article/labor-law-reform-horizon-ten-things-to-watch-under-pro-act


(2) EMPLOYEE.—Section 2(3) of the National Labor Relations Act (29 U.S.C. 152(3)) is amended by adding at the end the following: “An individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor, unless—

“(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;

“(B) the service is performed outside the usual course of the business of the employer; and
“(C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”.

www.congress.gov

Text - H.R.2474 - 116th Congress (2019-2020): Protecting the Right to Organize Act of 2019

Text for H.R.2474 - 116th Congress (2019-2020): Protecting the Right to Organize Act of 2019
www.congress.gov

I understand there was a similar bill in California. The Feds used the same language and criteria for determining when someone is an independent contractor or not. In California it reportedly caused lots of issues and some of the language was modified the next year. Since I don't live there I don't know any details, or whether it applied to the arborist industry.

Maybe this topic should be switched to its own thread?
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This isn't anything new here in Washington, in fact to the letter of the law contract climbing is illegal in this state.. UNLESS you bring your own crew, set your own schedule, DONT use anyone else's tools, and the general isn't involved on the task the sub is doing... The generals crew cannot act as ground workers and cannot use the chipper flowing the brush.. Blahh blah... We break these rules all the time, but it opens us up to massive liability with the state and they can afford better lawyers.
 
C would exclude subcontractors from being an employee if they have their own business name , EIN, insurance, etc. A building contractor subs to masons, drywall, cabinets, and so on. We sub to Crane, PHC, or independent climbers who can climb for who they want and when they want.

As long as we aren't saying to people, I'll write you a check at the end of the day, and 1099 you, but you only climb for me Mon-Fri 9-5 and wear our uniform. I've see companies do this to avoid comp and tax liability.
 
Has anyone ever heard of the department that handles worker’s compensation in your state showing up to contractor job sites specifically to verify you have worker’s compensation?
 
climbingmonkey24 said:
Has anyone ever heard of the department that handles worker’s compensation in your state showing up to contractor job sites specifically to verify you have worker’s compensation?
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Yes, it happens in PA, but only very rarely. I wish they did it more, weed out some of the “companies” that are running without insurance.
 
How about workers comp in an llc partnership? Just starting down the clusterfuck road of navigating changing business structure...
 
Serf Life said:
How about workers comp in an llc partnership? Just starting down the clusterfuck road of navigating changing business structure...
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If your LLC is a partnership, the owners should not need to carry workers comp. for themselves, at least here in PA they would not have to have it. The partners are treated the same way as any other sole owner would be.
 
In Florida, and it's probably the same if not very similar in most states, if someone works your job, they are either an employee on your payroll or a temp payroll, or a subcontractor. Any sub that you pay more then $600/year you're supposed to report with 1099 NEC. Sub's should provide proof of comp or exemption. If they don't, you pay the comp if audited.

Comp exemption is available to non construction industries with max 3 employees. If you file under class code 0106, tree pruning and spraying, you can get the exemption. Just say you do mostly pruning and not so much removal. It's a loophole, you are NOT protected.

Comp rates, if you can get it, are changed yearly and depend on your track record. Mine is under 9 cents on the dollar of payroll.
 
Knotguilty said:
In Florida, and it's probably the same if not very similar in most states, if someone works your job, they are either an employee on your payroll or a temp payroll, or a subcontractor. Any sub that you pay more then $600/year you're supposed to report with 1099 NEC. Sub's should provide proof of comp or exemption. If they don't, you pay the comp if audited.

Comp exemption is available to non construction industries with max 3 employees. If you file under class code 0106, tree pruning and spraying, you can get the exemption. Just say you do mostly pruning and not so much removal. It's a loophole, you are NOT protected.

Comp rates, if you can get it, are changed yearly and depend on your track record. Mine is under 9 cents on the dollar of payroll.
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That is an amazing rate!
 
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ATH said:
In Ohio officers of an LLC are not required to pay workers comp on themselves. However if they choose to I think the salary that they pay on is like $36,000 regardless of what the actual is. I think.
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My general liability has this scheme.. its based on gross payroll with caps on each employee and owner. So in price I'm better off working longer hours with less people vs fewer hours and more part timers...
 
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