# Is it legal for a company to deduct for Workers Comp



## madxtreme01 (Mar 5, 2015)

I was recently contacted by cyprexx to complete some work for them. I was told that if I did not have workers comp insurance that 9% of my invoices will be deducted to cover it. I am in an exempt state that as long as I don't have employees, I am not required to have this coverage. I can have it, but it would be useless as owners are exempt from the coverage. Is this legal for a company not to accept a states exempt form and require you to pay for this?


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## PropPresPro (Apr 12, 2012)

madxtreme01 said:


> I was recently contacted by cyprexx to complete some work for them. I was told that if I did not have workers comp insurance that 9% of my invoices will be deducted to cover it. I am in an exempt state that as long as I don't have employees, I am not required to have this coverage. I can have it, but it would be useless as owners are exempt from the coverage. Is this legal for a company not to accept a states exempt form and require you to pay for this?


Legal? Yes.

Problem is, they are not using the 9% deducted to purchase a comp policy for you. Really - Call them up sometime & tell them you'd like to file a claim on the -9% policy, you'll hear crickets on the other end. Their workers comp requirement is simply an in-house requirement they have come up with, doesn't matter to them what your state does or doesn't require. The -9% is their way of monitarily penalizing you for not meeting their companies requirement.

Legal? Yes
Ethical? Doesn't seem like it does it?


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## NewYork (Mar 22, 2014)

*comp*

Not sure what state your in but if your a sole prop and you need the comp file get the basic as a sole prop you never be able to file but outweigh the cost of the 9% vs the charge the will charge and at least it will be a insurance deduction vs losing 9% outright


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## Wannabe (Oct 1, 2012)

1) Owner Self Proprietors can purchase work comp on themselves (I do since I'm the most valuable person in my company 

2) you can purchase work comp policy to cover only "non-insured" subs in case of a work place accident (just like Cyprexx)

3) you can purchase a "non owners" policy without owners coverage. It's basically worthless BUT as NewYork said its better than 9% deduction. 

4) I have always thought this WC deduction is illegal and years ago, before I carried WC, when Cuprexx was a small company my CPA called their accounting office for a copy of Form ??? so I could deduct this "voluntary" contribution for Ins benefits. No form was forthcoming BUT they did stop the requirement.


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## safeguard dropout (Apr 21, 2015)

Tell them to list yourself as additional insured and ask for a copy of the insurance doc before commencing any work.


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## madxtreme01 (Mar 5, 2015)

safeguard dropout said:


> Tell them to list yourself as additional insured and ask for a copy of the insurance doc before commencing any work.



Not a bad idea, although we all know where this will lead. I'm going to do a little more research.


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## Craigslist Hack (Jun 14, 2012)

Again the obvious answer here is don't work for Cyprexx. Never under any circumstances. If there were a way I could be more blunt I would.


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## madxtreme01 (Mar 5, 2015)

they contacted me about rehab, not regular preservation. The pricing that they gave me seemed fair, and I have been trying to get into that side of the biz since I started. I've done a few bids for a few realtors, but I assume I'm just their backup bid because I have never gotten an approval. I don't really know where else to get them.


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## Craigslist Hack (Jun 14, 2012)

madxtreme01 said:


> they contacted me about rehab, not regular preservation. The pricing that they gave me seemed fair, and I have been trying to get into that side of the biz since I started. I've done a few bids for a few realtors, but I assume I'm just their backup bid because I have never gotten an approval. I don't really know where else to get them.


No ONE should ever GIVE you pricing for a rehab. You give them YOUR pricing.


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## safeguard dropout (Apr 21, 2015)

madxtreme01 said:


> they contacted me about rehab, not regular preservation. The pricing that they gave me seemed fair


Are you referring to the $1.24 flooring sq. ft. painting gig? Where are you going to make up the losses?


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## BRADSConst (Oct 2, 2012)

Craigslist Hack said:


> No ONE should ever GIVE you pricing for a rehab. You give them YOUR pricing.


While I agree totally, Cyprexx is spinning FNMA rehabs. FNMA has unit pricing and that's what they're trying to find someone to complete.....


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## madxtreme01 (Mar 5, 2015)

does anyone know a link to where I can find the FNMA allowables for this type of work? I have been told I can turn down work (obviously), but there are no trip charges, so if I don't like the numbers and say no, I just wasted my time. They told me they don't have a specific price sheet as different clients have different pricing. Doesn't really help me to see if they are a good fit with my business model, but I thought I'd give it a shot.


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## Zuse (Nov 17, 2012)

PropPresPro said:


> Legal? Yes.
> 
> Problem is, they are not using the 9% deducted to purchase a comp policy for you. Really - Call them up sometime & tell them you'd like to file a claim on the -9% policy, you'll hear crickets on the other end. Their workers comp requirement is simply an in-house requirement they have come up with, doesn't matter to them what your state does or doesn't require. The -9% is their way of monitarily penalizing you for not meeting their companies requirement.
> 
> ...


Please read the above post, yes they can make you.whether you agree to it is your choice. most states will give as waiver, like your southern sates.

For an example if the IC signs a weaver stating that they are required to provide their own WC and GL then the liability falls on them. Waiver will hold up in court if the IC was not coursed into sign said waiver. if they know well in advance that this a a requirement to get the work, the liability will fall on them the IC solely. But their are lawyers how milk the IC and tell them that that they can make a claim but it will fall on the judges deaf ears. courts are well aware of the incompetence of IC trying milk the system for money. so in the end the IC gets charge for a lost case. Plus the fact that the IC will continue for the same company even after after a claim is made. Its called playing the system for *Double jeopardy.

But most contractors fall for the lawyers line. but in the end they lose and end up paying the lawyer for loosing the case.

IC contracts are written to hold up in court even if their ambiguous. 
*


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## Craigslist Hack (Jun 14, 2012)

BRADSConst said:


> While I agree totally, Cyprexx is spinning FNMA rehabs. FNMA has unit pricing and that's what they're trying to find someone to complete.....



Went to a FNMA job yesterday I put in MY bid. If they come back with any disputes over my pricing I will tell them to kick rocks. 

I have never had a good experience with FNMA. Just my personal experience but I find Freddie much easier to work with.


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## PropPresPro (Apr 12, 2012)

Craigslist Hack said:


> . . .I have never had a good experience with FNMA. Just my personal experience but I find Freddie much easier to work with.


Ditto
But just for emphasis let me re-quote this:
*"I have never had a good experience with FNMA" *


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## BRADSConst (Oct 2, 2012)

Craigslist Hack said:


> Went to a FNMA job yesterday I put in MY bid. If they come back with any disputes over my pricing I will tell them to kick rocks.
> 
> I have never had a good experience with FNMA. Just my personal experience but I find Freddie much easier to work with.


Agreed. I prefer PAS rehabs but those are few and far between around here. Freddie is better than FNMA, but that's not setting the bar very high.


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## NCnewbie (Aug 6, 2014)

All my realtor clients love to tell me how FNMA is where the money is at. One just contacted me about a property that I bid yard work on over a year ago and has remained untouched ever since. Asked me to please be conservative because she has to pay out of pocket and hope to be reimbursed. "Grass" was well over 6ft tall back then, can't wait to see how thick it is now. I'm tempted to just throw out an outrageous number to save the gas because I know I'm not going to get it. She has to "get multiple bids but she'll try to sway them towards me the best she can" and if I do the yard work she'll get me the trash out as well.........


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## Nightowl (Nov 25, 2013)

I have been paying the 9 percent for a long time because I didn't know any way around it.


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## NewYork (Mar 22, 2014)

*Workers comp*

What state are you in ,and paying 9% I get keeps you in compliance but who owns the policy, and how do you check to make sure it is in effect should something happen.And what is 9% represent 9 of what invoices sales, net,


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## IPS (May 24, 2015)

The 9% is taken right off each job you preform.Essentially it's their discount, extra money in their pockets. I just received an email stating how they are now requiring you to have an E and O policy as well. And they HAVE to be purchased from one of three approved companies. Great!


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## Wannabe (Oct 1, 2012)

Well there is 1 way to check the coverage 

Call in to the Company and tell them you want to fill a Report or Notice of Loss per OSHA/Labor Dept regulations. See if they actually send you the report/Notice forms to fill out. 

They may ask you a bunch of questions but due to Privacy Concerns you don't want to share this with a P&P cubicle worker but want to report directly. You have to tell the companies WC handler what happened and I would say I woke up with back pains and may need a little time off (with pay of course) 

I will tell you if the company name starts with C and ends with X we did this many years ago and the requirement went away--this was before I had WC on the P&P business since we had WC for our GC Business.


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## Bigtrucker (Mar 18, 2014)

Zuse said:


> Please read the above post, yes they can make you.whether you agree to it is your choice. most states will give as waiver, like your southern sates.
> 
> For an example if the IC signs a weaver stating that they are required to provide their own WC and GL then the liability falls on them. Waiver will hold up in court if the IC was not coursed into sign said waiver. if they know well in advance that this a a requirement to get the work, the liability will fall on them the IC solely. But their are lawyers how milk the IC and tell them that that they can make a claim but it will fall on the judges deaf ears. courts are well aware of the incompetence of IC trying milk the system for money. so in the end the IC gets charge for a lost case. Plus the fact that the IC will continue for the same company even after after a claim is made. Its called playing the system for *Double jeopardy.
> 
> ...


Get a better lawyer
Most contractors are to afraid to do anything.
I might get black balled.
Get some balls if you were screwed then sue them.
Having there one sided contract doesn't give them the right to screw you.


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## industrialguttersma (Feb 23, 2016)

madxtreme01 said:


> I was recently contacted by cyprexx to complete some work for them. I was told that if I did not have workers comp insurance that 9% of my invoices will be deducted to cover it. I am in an exempt state that as long as I don't have employees, I am not required to have this coverage. I can have it, but it would be useless as owners are exempt from the coverage. Is this legal for a company not to accept a states exempt form and require you to pay for this?


Unfortunately, yes. They do have all the legal rights to state their own protocols and it also depends on the local policies attached therein in line with their field of industry. 

Regards,
George
http://industrialguttersma.com/


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## Cleanupman (Nov 23, 2012)

madxtreme01 said:


> I was recently contacted by cyprexx to complete some work for them. I was told that if I did not have workers comp insurance that 9% of my invoices will be deducted to cover it. I am in an exempt state that as long as I don't have employees, I am not required to have this coverage. I can have it, but it would be useless as owners are exempt from the coverage. Is this legal for a company not to accept a states exempt form and require you to pay for this?



I'm not a lawyer I just pretend to be on the radio but I think this would be a serious Fraud test case...
If the withhold monies tagged Workman VComp...they need to provide WC....my understabding is they do not but they with hold for it


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## STARBABY (Apr 12, 2012)

Cleanupman said:


> I'm not a lawyer I just pretend to be on the radio but I think this would be a serious Fraud test case...
> If the withhold monies tagged Workman VComp...they need to provide WC....my understabding is they do not but they with hold for it


would think they would get in trouble for this. I worked for them for about four years and never seen paperwork showing what my 9% was buying.let a companies take monies from employees for taxes ,but not turn it in . bet owner of company would be sitting in jail.


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