workman's comp issue for a lease operator?

Ok I would like to add a team rig to my operation. I have my own Authority and am currently a sole proprietor. Based in Michigan. I would like to add a team of two brothers who would structure their business as a partnership.

I am concerned about being required to have workman's comp for them or requiring them to carry it. I have been paying it for a employee and it is very expensive.

This leased team can refuse a load, but they are expecting me to dispatch and find loads for them. My comp insurance company claims unless I make them partners they must have workman's comp.

If you lease on a truck are you required to have workman's comp if the driver(s) is the owner(s)?

 

If you want the correct answer, either call a workers comp lawyer, or call the state office division of workers comp and ask to talk to someone on the legal side and ask them,.

 

Most likely going to need to do that. Got off the phone too late with the insurance company. I am waiting for a call back from one of their specialists also. I found some info with a state of Michigan office number.

I have never been a lease operator always been independent. What happens when you lease on to a big or small carrier. Is the workman's comp issue addressed?

 

I've been there.

Worker comp in Michigan is the cheapest anywhere. but if they are from say Indiana, they have to get it from their home state. This is what I had to deal with, and it is really their responsibility because they are a business entity seperate from your company/authority.

The other thing is to make sure your contract is clear and written by a lawyer. I sit down with the driver and go through the entire contract with them, section by section to make sure they understand what's what.

 

All parties concerned are in Michigan. What concerns me is the stuff I was reading seems like the state of Michigan really wants to classify a subcontractor as non independent. Thus requiring the insurance.
Maybe I was being ripped off. But I found workman's comp very expensive for my codriver. Even with no claims.

 

This depends on the individual state. I don't know the MI laws concerning the workers comp issues.

You may be able to have them purchase Occupaitional accident/injury insurance to meet the requirements, this is the most common way.

 

I believe that you are only responsible for covering your own employee’s. http://www.michigan.gov/documents/wca/wca_fact_sheet_390062_7.pdf has a phone number for asking questions regarding Michigan workman's comp insurance.

If they have structured themselves as a partnership legally and file with the IRS as one then they are running their own business and they should be responsible for their own workman's comp insurance. Are you giving them a 1099 or deducting taxes and S/S from their pay?

 

This looks like a good idea if they can avoid the mi workman's comp. Thinking about it for myself. This looks affordable. If my quick search turns out to be accurate.

The michigan law concerns me. Based on what I read it looks hard to avoid. My interpretation might not be correct though. Just wondering if anyone had michigan experience since this seems to be by state.

 

1099, but what I read that concerned me was if they could meet the standards as a independent contractor. With them being leased to me only.

 

If they are supplying their own truck and can decline loads, pick their own loads, and set their own schedule or rate they are independent contractors.

If you are giving them a 1099 you are already treating them as an IC as you cannot 1099 employees, 1099’s are for independent contractors.