# Work comp problems... help?



## caleb31 (Mar 31, 2009)

I have a small roofing company in murfreesboro, tn. I have general liability and work comp. Right now, I'm excluded from my work comp and none of my workers are on my GNRL liability that i just got. I plan on things picking up and i honestly want to do things right but here is what they are telling me. IF I add employees to my GNRL liability it shoots up substantially. But the bigger problem is work comp. How can I lower my work comp?? Right now they say that I have to pay 28% of their wages into work comp?!?! So I have to pay 28% of their wages into work comp and that doesn't included taxes! So my foreman making $18 an hr is only going to be making $10 an hour (after 20% tax rate, and 30% work comp)... 
There must be something I don't know about or roofing companies are taking on large risks for nickels and dimes. How can i lower than? branch out? any ideas? help?!?!


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## red_cedar (Mar 9, 2009)

You should consult with your insurance guy and an accountant.
The cost of workers comp is not related to taxes that are taken out, it goes on top of what you pay your worker.


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## Ed the Roofer (Sep 15, 2008)

Your foreman will still make his $18.00 per hour minus his legal withholding taces, State, Federal, FICA (7.65%), but you, The Employer will be footing the bill for the 28% Wormans Compensation Premium, which at 28% (Which Is Very Cheap), would cost you an ADDITIONAL $5.04 per hour at regular hourly wages.

Remember, that as the employer, you also have to Match the 7.65% FICA tax withholding.

Depending on your State, you will also be hit with an additional fee for Unemployment Benefits, depending on you SIC, (State Industrial Code), and previous work Rate Experience Factor, which since you have no history as an employer with employees, will wind up being at the Highest permissable Rate Allowed.

Now, take all of these additional fees that it will cost you and figure out how many Man Hours it takes to do each job and add these sums to your Charged Hourly Rate when you bid the job.

Further, since this is an additional expense to you, you should Mark Up these expenses on you Per Hourly Bid Price Calculations.

Ed


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## OUTLAW (Feb 16, 2009)

You must account for these expenses and charge accordingly.

You can cheat and lie, but that is not the right way to do business.

I hear on a daily basis that my price is 30-50% higher than the other quotes that they got. I know that this is because 95% of the roofers in my market are cheating. Most just hire subs. They find one guy who speaks English and has an insurance certificate.

When you hear that the "going rate" is so much per square, don't believe it. A real roofing company cannot work for those rates. Hell, I can't produce the work for those rates. Let alone cover my overhead and profit.

Anyhow, figure these costs as Direct Job Costs. They should be charged to the job. They are not really overhead.

Good Luck!


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## Grumpy (Oct 29, 2008)

You don't lower your work comp, you raise your prices to do it right. You don't put them on as carpenters, but as roofers. You put yourself on as a supervisor, if at all. You multi-class if your state and carrier allows is, for example gutters is a lesser rate than roofing. But you need to keep very accurate records for multi classifying. My carrier allos it because we are computerized.

I expect to pay $10k per year per roofer just for WC. 28% around here is for carpenters, roofers are 41 or 42%. I find I have to double the hourly wage I am paying to a worker just to break even on insurance, taxes and other labor burdens. Therefore if I am paying a worker $20 an hour I have to charge the customer $40 an hour just to break even, but that's not breaking even because trucks, office, advertising, etc also need to be added on. In my area I can't see how anyone can charge less than $60 an hour without cheating... 

I personally bill out at $80 per man hour for a crew of 3 or less. More than 3 and I can adjust that $80 if necessary. I also markup materials 45% ontop of that. I used to charge $75 but then realized last year when gas prices were high that I was spending $5 per hour on a 40 hour week, $200 a week for one van, so I raised my price. Since I was getting it, I deceided not to lower it


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## ronbryanroofing (Mar 25, 2009)

Caleb, 

I lived in Tullahoma, TN just South of you for a couple years. The whole Insurance game down there was pretty lax to say the least. Most of the Contractors play the ABC game and everyone is a sub of a sub of a sub. Then married to a Accountant I was not allowed (House Rules). We were legit and safe as you should be too. Join in the Builders Association they will assist a lot as my Insurance guy was way up the chain and he made it very affordable to be legit. Depending on the type of Roof Work you do (New/ remodel) you may certainly grow your Business through the Builder Network. 

When you really look at all the benefits you offer your employees and protecting them and yourself/ assets it is a no brainer. We were set up with a monthly payment so as if you work you make money (hopefully), and pay accordingly, and when you are not paying help you are not paying Comp. 

Imagine this: you hire a local kid in College working the summer and pay him "under the table". Inexperienced he makes a wrong move and gets hurt. Not slightly hurt where you can carry him to the Hospital and pay cash, but really hurt when he will never be right again. Thats why everyone needs to be Legit of stay off the roof. 

I will gladly look up and Private Message you the Contact info if you are interested.


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## caleb31 (Mar 31, 2009)

*Thanks for all your help!*

thanks everyone for your help. It's hard to charge more when business is slow as it is (small company) and being taken by crews charging prices I wouldn't even sub-contract for. I am very interested in the Tullahoma guy emailing me. feel free so and anyone else offering advice. Legit is what I want, but right now having problems affording.... [email protected]... love to hear from you and appreciate all the responses you guys are great!


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## caleb31 (Mar 31, 2009)

hey send me that info.. [email protected]


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## builderr (Apr 1, 2009)

trust me when I tell you that all of the short cuts and underhanded 
scheming advice that some guys might give you is nothing but a 
prediction for failure. First, you will loose sleep over guilt, then you'll start
ducking phone calls from #'s you don't know, then you'll get into a situation
where YOUR lawyer advises you that you have no recourse because "blahblahblah"
you didn't pull a permit, your guys weren't properly insured, etc. 
If you add employees, your liability insurance goes up BECAUSE...
your income is going up. When the industry gets backed into a corner again,
like it recently has, you don't want to be handicapped because of something you did 
early in your career that saved you a few bucks, and now will cost you big bucks.

If you can't compete pricewise, find out how to be more efficient to be able to be profitable at the prevailing rates.....If you spend your energy moving forward rather than looking over your shoulder...or at the past, you will be way ahead of the game, and certainly at the head of the pack when legality becomes an issue. There's a certain satisfaction that comes from being the only local guy totally qualified to bid on specific jobs.


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## SinglePlyGuy (Jan 7, 2009)

I would give my left one for 28%....

Everyone here gave solid advice.


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