Five Brothers - REO Property Preservation Forum
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post #1 of 14 (permalink) Old 10-08-2014, 11:10 PM Thread Starter
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Exclamation Five Brothers

I received an email like most today from Five brothers Requiring all Contractors,Inspectors,Bpo etc Requiring everyone to carry workers comp lol.
They just took all inspectors and made them employees! How can you place someone as an employee making $3.00 per inspection?Requiring taxes with held,unemployment insurance,Disability insurance etc!It will be interesting to see how it all pans out.

What do you guys make of it?


Note NYS:18% Of gross Payroll
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post #2 of 14 (permalink) Old 10-09-2014, 05:18 AM
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I would think that the lawyers they have wouldn't let anything fgo out officially until they did their due diligence and made sure they were protected. They seem to be laying groundwork for a precedent.
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post #3 of 14 (permalink) Old 10-09-2014, 06:03 AM
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5 Cousins is located in MI. MI law requires all business' to provide workers comp insurance, just like every other state I'd bet. That means all sub contractors must provide comp also.

In MI, if you are a business with no employees, you work by yourself and maybe only hire subs, you can apply thru the state for a work comp waiver form - meaning you don't have to go thru the BS of minimum policy costs and audits....

Years ago, during the building boom, everyone was "self employed" and a lot of people just carried those waiver forms here in MI.

I have employees, carry comp - now during the yearly audit, they don't easily accept those waiver forms. They want to see how much you paid, how often they worked, what work they completed, their liability ins and how their business is registered. Basically, they want to make sure this sub is a true sub and not some 1099 person working for you. One guy has worked for me for years plowing snow, my insurance refuses to take his comp waiver for whatever reason and I have to deduct comp costs from his pay.

I'd bet that 5 Cousins insurance carrier is dictating this policy and in reality, it really is no different than in the past - the law hasn't changed, you should have always carried comp or some type of waiver.
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post #4 of 14 (permalink) Old 10-09-2014, 09:12 AM
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Curious as to how you think that requiring WC makes one an employee? Makes no sense.
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post #5 of 14 (permalink) Old 10-09-2014, 09:04 PM Thread Starter
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Each state is differently,Here in NY it works by Employees its 18% for every $100 Of Payroll. They will have to hire each inspector with an hourly rate and milage reimbursement i would assume(NYS Fair Play act-any person working in construction is presumed to be the employee of the person or business for whom he or she is working.)Preservation falls in that category so if you sub out a boardup or lock change ets its all under this law.How can you sub out a lawn to someone with out classifying them as an employee?Its not gonna happen.Anyways i don't care i no longer do any work with them they call me everyday.
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post #6 of 14 (permalink) Old 10-10-2014, 07:45 AM
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I find it hard to believe that NY has a flat 18% comp rate.

A person cleaning offices has just a tad less exposure than a guy setting steel 30 stories in the air.

This is why we have payroll classes, it makes it easier when audited.
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post #7 of 14 (permalink) Old 10-10-2014, 03:40 PM
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NY is not Flat Rate. The rate varies by Classification.
IE: Roofing is about 36% where as Landscaping is about 10%
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post #8 of 14 (permalink) Old 10-10-2014, 09:51 PM Thread Starter
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My mistake NY fund is 18% for carpentry.Scarpentry . still how can you pay that with 2.75 an inspection that safeguard pays if you have subs????
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post #9 of 14 (permalink) Old 10-11-2014, 07:27 AM
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I thought we were discussing 5 Brothers, not Safeguard?
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post #10 of 14 (permalink) Old 10-11-2014, 08:41 AM
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1) Cause if you are doing inspections, you ain't doing carpentry work.

2) If you are subbing it out, your sub should carry the insurance also which cancels the cost out on your policy - otherwise charge the sub the insurance rate.

Try and be smart about what you say you exactly do when going thru audits. In MI, comp does not cover the business owner. Therefore, the business owner did 90% of the "risky" work and employees were classified as janitorial - 6.75% rate.
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