In my state of New York, certain business situations can exempt one from requiring WC coverage. Here is a clip from the New York State Insurance Fund’s website. The NYSIF is an agency pool providing WC coverage to many small businesses in the state.
The item in italics has been emphasised by me.
Who is not covered by the WC Law
- Clergy and members of religious orders;
- People engaged in a teaching or non-manual capacity for a religious, charitable or educational institution;
- People employed in certain maritime trades, interstate railroad employees, federal government employees and others covered under federal workers’ compensation laws;
- New York City police officers, firefighters and sanitation workers (Uniformed police officers and firefighters in other municipalities may also be excluded);
- Certain real estate salespersons who sign a contract with a broker stating that they are independent contractors;
- Media sales representatives;
- Sole proprietors, partners, and one- or two-person corporate officers with no employees (although coverage may be obtained voluntarily);
A general contractor hiring a subcontractor such as this, with no employees, need not cover that sub under his own WC coverage, nor insist that the sub provide WC coverage of his own.
By subcontractor I mean all the usual and correct things. No direct supervision, no direction as to work times, work is for contracted price rather than for hourly pay, materials provided by subcontractor, yadda, yadda, yadda. All the tests met.
Have you any experience with this WC waiver, from either side of the business?
Replies
Can you be more specific re: what experience you're curious about?
The law is the same in Ca. I'm a lic. GC in the bay area with no employees currently, so I don't pay wc. If I need labor, there are labor pools that handle all the wc paperwork etc., but they do charge for all that.
You can pay a sub hourly as long as it's a t&m scope of work contract w/o direct supervision, but check that out for yourself.
FWIW, I'm also not required to have medical or liability insurance, just a $12,500 bond with the state. Medical in Ca. may be required soon, like in Mass. Liability coverage is encouraged if you're not incorporated, especially if you have valuable assets, like a house.
I'm still not sure I understand the post. But then, I get confused a lot...
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k
I'm not sure where you are going with this Gene. Perhaps you were recently quoted a premium? Ok, so you have been able to get back up off the floor......
A general contractor hiring a subcontractor such as this, with no employees, need not cover that sub under his own WC coverage, nor insist that the sub provide WC coverage of his own.
By subcontractor I mean all the usual and correct things. No direct supervision, no direction as to work times, work is for contracted price rather than for hourly pay, materials provided by subcontractor, yadda, yadda, yadda. All the tests met.
Have you any experience with this WC waiver, from either side of the business?
I assume that is your writing and I am not sure it is correct.
I had a Westchester Home Improvement License up until recently and the county would require you to get a waiver notarized from Workmans Comp. Not exactly the easiest thing to do as they know everyone is trying to skirt the required insurance. Your are presumed guilty going in.
As it became nearly impossible to even get a liability package in NY I decided to call it quits and go to work for the man.
Who do you have your GL with Gene?
As for the contractor hiring a sub, he most certainley insist on WC. It's his contract, it's his perogatve.
Would you have someone work on your property that had no WC?
I did a brief stint a year or so ago as a subb for a fabricator. He deducted the WC from my hourly rate ans everyone was happy. I'm not sure what it would look like on his books but I understand that this in not uncommon. I think he was pulling off 5%.
If his carrier audits him they will want all subs covered. Period.
Eric
[email protected]
i have been around the block a couple of times w the state insc fund and no one who has ever hired me as a sub would let me work without a wc certificate . my undrstanding is it is not the state requiring it but the g.c. s insc company when the g.c. gets hic wc audit they want to see certificates or he has to pay wc cost on any money he has paid out for labor.by the way if you are shopping for a policy check out a.t mathhews & dierin watertown(i used billie ward0
Eric,
My past experience as a sub in NYS is much like yours. I was never given an option about carrying WC by any GC, even when I was working alone, unincorporated, and could not be covered by the policy myself.
Edit: I'll echo what 3kings wrote. That's exactly how it was always presented to me by the GCs.
This bring up another insurance queston. As a homeowner, how do I best protect myself from claims arising as a result of hiring casual labor or even doing barter deals, such as what's under discussion here in another thread? Is it simply a matter of increasing my homeowner's insurance coverage or is there another type of insurance for homeowners?
Edited 3/31/2008 8:04 am by Hudson Valley Carpenter
This bring up another insurance queston. As a homeowner, how do I best protect myself from claims arising as a result of hiring casual labor or even doing barter deals, such as what's under discussion here in another thread? Is it simply a matter of increasing my homeowner's insurance coverage or is there another type of insurance for homeowners?
If you have WC you could just cover them, but you knew that.
I'd say call your HO Insurance carrier. I think it can be done but I also believe that this has become a rather messy issue of late.[email protected]
I'd say call your HO Insurance carrier.
Sure, as a first step but I'd like to hear if anyone not connected with the insurance business has an advisory story to tell on that subject.
I hear you there. No sense ruffling up those feathers. Rate hike will be in the mail as soon as you hang up the phone.
No work today?
We're on lay off. Couple of weeks; waiting on some permits. Slowed down a lot from where we were last year. A 'little' scary.
Hows it up by you?[email protected]
By me it's early AM in sunny SoCal. I'm in semi-retired mode, just work on my own stuff now. Got a few punch list items to do on this old stucco ranch and it'll be on the market.
In NYS your homeowners policy has a rider covering casual workers.
It was explained to me, that contractors would not be covered.
As I read my policy, there didn't seem to be an exclusions. I have heard of homeowners getting sued but never experiensed it.
I require a copy of certificate from contractors working on my house.
Hi Eric,The only real way to protect yourself as a homeowner would be to have any contractor that you have on your property do the following:1. Have the contractor sign a "Hold Harmless Agreement." You can have a local attorney draft one or Google for a template you can use in NYS.
2. Provide proof of WC insurance.
3. Provide proof of liability insurance.If anyone has ever done work for a municipality they generally require a hold harmless agreement. You could probably get a copy of one your local town uses when contractors do work for the town. This would give you an idea of the appropriate wording.Make sure the insurance certificates are valid by checking with the issuer. The hold harmless agreement would contain language stating that WC and GL coverage has to remain in-force during the course of work preformed on your property.This should CYA. But in our current litigious society you still may have some 1800GETCASH attorney sue you.
Good answer, thanks.
I remember signing a hold harmless agreement with one client, many years ago. He was a recent transplant from NYC and a business owner so that explains why he'd be up to speed, more than most others. He was also paranoid which explains the rest of it. LOL.
in terms of ho owners coverage around me upstate NY some municipalities require proof of insc to pull permits although on most occasions I have never had a ho ask for proof of ins
Proof of ins. to pull permits.
Towns were requiring but Amish do not buy ins. This is not a state requirement as some towns were telling us.
Personally I think this would be a good state requirement. This would
help get rid of the hacks/w/no ins.
Gene, is this another one of your hit and run posts? See you're still trying to get around the insurance issue.Lot of ways you can "legally" waive WC... but if you're a gc and hire an uninsured sub, when your insurance audit comes up someone's paying them around 17%.Some counties around here have to insurance certificates before a permit's issued. Winterlude, Winterlude, my little daisy,
Winterlude by the telephone wire,
Winterlude, it's makin' me lazy,
Come on, sit by the logs in the fire.
The moonlight reflects from the window
Where the snowflakes, they cover the sand.
Come out tonight, ev'rything will be tight,
Winterlude, this dude thinks you're grand.
Snort, as I am sure you know, you can do work for years as a sole prop or as a pair of partners, and avoid the whole mess of WC coverage, by working directly for property owners.
Here where we operate, you can do all the work you want inside a house, in the way of cab guts and replacements, without need of a building permit. Contractors here cannot pull permits without evidencing certs for WC, GL, and disability. Property owners, however, only ask for GL coverage.
Your nice big GL policy will evidence all the coverage your clients need, and if you are in my state, that goes even if your client is a lawyer.
It is when you want to show up on some GC's site that the WC thing comes into play.
We can readily do what we want to do, if GC biz is in our future. At practically no cost, we can get WC coverage for the biz, by stating ridiculously low expected employee payroll. Corp officers are waived from being covered, and at annual audit time, when those number showed in fact no employee payroll at all, most all of that little upfront premium gets refunded.
I wuz just wondering how others approached things.
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"A stripe is just as real as a goddamn flower."
Gene Davis 1920-1985
At practically no cost, we can get WC coverage for the biz, by stating ridiculously low expected employee payroll. Corp officers are waived from being covered, and at annual audit time, when those number showed in fact no employee payroll at all, most all of that little upfront premium gets refunded.I'm guessing you're talking about a ghost policy... you pay for the paper but can't make a claim.I understand where you're coming from now, but don't really understand why it's a question... I've never even seen a rumor of an insurance refund<G> If dogs run free, then what must be,
Must be, and that is all.
True love can make a blade of grass
Stand up straight and tall.
In harmony with the cosmic sea,
True love needs no company,
It can cure the soul, it can make it whole,
If dogs run free.
He's not doing anything wrong or illegal Holly. The contractor has no obligation to overpay and the insurance companies allow the owners to waive coverage. It's a gamble...but many business owners don't work out on the jobsite and don't have any exposure anyways. For instance, If I make 50K and don't waive the right to collect WC, my premium would be about 5k here in TX. I might only pick up the tools once this year out in the field and that would be a ridiculous waste of time. So, I'd waive my rights to collect and just hire someone that day that I wanted to work. The WC people won't let me split my payroll between operations management and onsite supervision. If I step onto the jobsite one time, all my wages are tagged as site work. That's their rules. Thats why I'd waive the WC coverage. Bob's next test date: 12/10/07
Jim, I know, I'm just jealous<G> If dogs run free, then what must be,
Must be, and that is all.
True love can make a blade of grass
Stand up straight and tall.
In harmony with the cosmic sea,
True love needs no company,
It can cure the soul, it can make it whole,
If dogs run free.
Gene, here in TX the minimum premium we would pay is 7k. That would be the premium, with no refund if we did only $1 of business. Each state is different. In MI the minimum was $500 I think. They are going to audit the books and assess WC premiums against every dollar of subcontract or payroll that doesn't have a WC cert attached to it. That minimum fee gets used up fast if you're GCing. Bob's next test date: 12/10/07
Gene: I have in the past pulled permits without proving wc etc.. They
had an allowance in the law for sole prop.. I think sometimes the laws
in these individual towns don't take into account everything they should.
Would you have someone work on your property that had no WC?
It's been some time since I worked for a HO in NYS so maybe they're generally more aware of who's responsible, etc than they were some years ago.
By my recollection and calculation I worked for about one hundred NYS HOs as a contractor and not one of them, including a few lawyers, ever asked me about insurance coverage for them, for me or my employees.
No doubt Hudson.
But as ho's become more savvy and start reading our threads.............
Down here the county puts forth information on it's Consumer Protection website indicating the need for that to be fulfilled.
The party has been more or less over for a while in these parts. The farther away from the big cities you are the less these things are and issue it seems.
But we still need to cover our azzes just the same.
Billy Bob can git him some lawyerin' just as easy as the Land Rover driving missy in Scarsdale.[email protected]
Gene, the laws in Texas are even more liberal concerning WC coverage. In this state, companies do not have to provide coverage. Also, employees can REFUSE coverage with a signed waiver.
This confused me so I had a little consultation with a Texas lawyer about all this. This was his advice:
Get coverage and do not allow anyone to work with that signed waiver. If they sign the waiver, it means that they are still able to sue the homeowner and name me as a third party.
Basically, the waiver will not protect you from their injury. Their may be other language in your contract that does (indemifying language) but I would be very careful and make sure that it is done properly with the proper disclosures. For instance, a recent article in Remodelor stated that to properly imdemnify, the language should be stated in bold large letters on the front page of the subcontract agreement.
Verify all this with your local lawyer.
Bob's next test date: 12/10/07