Ways to get around NC workers compensation requirements

As I understand it if you are a owner operator driving your own truck, under your own authority, you don't need it. Now if you hire someone to drive your truck he/she is a employee then you must have it for them. When we drove for Bolt as a team Bolt required it from all their drivers that were O/O. This I understood because Bolt had more than 5 employees the state required it. I never understood that. When other carriers ask me for OAI I tell them I'm exempt, in TN, and I never had a problem. I only have my wife and I who drive at the present time. When we had 8 trucks leased to us it was the same, no OAI insurance needed because we never had more than 5 employees at the company. Again this in TN.

 

May want to reread that. It basically establishes who is liable in a contractor subcontractor situation. With only 2 employees you do not have to have WC but if you do not get WC and are injured on the job, then FedEx is held responsible. I would have thought that FedEx would either require you to have it or provide it to keep from being responsible if something happens.

Something unclear in your initial post. It appears you may believe you pay the WC rate on your truck’s gross. If so this is incorrect. You pay the rate only on actual salaries paid. If for instance you paid yourself a $500 salary and your wife a $500 salary you would pay 5.2% of a $1000 or $52.00 not $104. 5.2% is not a high rate. Check out pulp wood companies. Last I saw it was 98%, so for every $100 paid in salaries, they pay WC $98. That’s high. That’s why very few have WC and why pulp wood has been going bye bye.

 

Late to the party.

No, he is asking for information on tax avoidance.

OP, call the WC in NC and get a direct answer.

 

From what I can find, as an O/O in North Carolina working under a sole proprietorship or LLC with one employee, you don't need WC. But, FedEx is required to have WC on all employees including sub-contractors, so they are putting you in the position of obtaining it. It sounds like FedEx is too cheap to buy a blanket policy to cover sub-contractors such as yourself.

North Carolina Workers Compensation Insurance | WorkCompOne


Trucking companies: Truck drivers must be covered by a workers’ compensation policy, even if the owner-operator is considered an independent contractor. The principal contractor can be held liable for the owner-operator, and their employees or subcontractors, in the event of injury or death.

A trucking company may obtain a blanket policy to cover all independent contractors and their employees or subcontractors.

 

Its like this.....If you have more than 3 employees you're required to have a workman comp policy per NC regulations. There is a such thing as a "ghost policy"... fed ex may not allow this though. Ive been through this very same thing when I was leased on to a carrier who thought this same thing of the NC regulation.....

 

Yes, it’s a percentage of payroll, but for them to do that you would have to provide them or their WC carrier with payroll info. Absent that the only thing they have to go on is the truck gross. If they charge you the 5.2% of gross for each driver rather than 5.2% of total payroll I would contact the NC WC commission. Hopefully it’s just a misunderstanding.

 

Y'all are making this harder than it needs to be.

WC is required (BY THE STATE) if your operation has 3 (THREE) or more employees.

Since you are an O/O with less than 3 employees, then you are NOT REQUIRED to have WC, and fedex cannot force you to get it.

They can ask, but you dont have to get it <-------> same as you can ask for a higher rate, but they dont have to give it to you.

Push comes to shove, just adjust your price to Fedex by 10%, and if they negotiate you down to 5.2%, then you are still golden (i.e. they are paying for it, just dont tell them that)