# Ca Workers Comp Insurance



## Tessa7707 (Sep 17, 2012)

I already have a liability insurance policy for teaching lessons for my riding academy, now I'm looking to hire some employees because I am booked solid with seven people on my waiting list! I know the employees I would be hiring, but I want to do this right. I don't want to do under the table or anything. I've done everything else the right way so far and I don't want to mess it up now! Anyone have a company that they've worked with that does workers comp in Ca for employees teaching riding lessons? Some people I have talked to don't cover ca, others only cover the racing industry. Any help would be greatly appreciated! Oh, and these instructors purchasing their own insurance policy is not an option. They can't afford it. Thanks!


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## Tazmanian Devil (Oct 11, 2008)

Tessa7707 said:


> I already have a liability insurance policy for teaching lessons for my riding academy, now I'm looking to hire some employees because I am booked solid with seven people on my waiting list! I know the employees I would be hiring, but I want to do this right. I don't want to do under the table or anything. I've done everything else the right way so far and I don't want to mess it up now! Anyone have a company that they've worked with that does workers comp in Ca for employees teaching riding lessons? Some people I have talked to don't cover ca, others only cover the racing industry. Any help would be greatly appreciated! Oh, and these instructors purchasing their own insurance policy is not an option. They can't afford it. Thanks!


I know nothing about CA law, but do run a (non-equine) business in another state.


Liability insurance and workers comp insurance are two entirely different things.

Depending on your situation, you may have some options:

1. Have instructors as "independent contractors." This eliminates the need/requirement for workers comp.

2. Depending on the number of workers and number of hours worked, you may not be required to carry workers comp.

3. If liability insurance is what you are concerned about, each instructor _should_ have their own. Depending on your situation, you _MAY_ be able to include them on your policy if then are unable to get their own.

A local barn here has "house" instructors and "outside" teachers. The "outside" instructors are required to have their own insurance. They get paid directly from their students and pay a ring fee to the barn. "House" instructors are covered by the barns own liability policy - their students pay the barn directly and the instructor gets paid per lesson from the barn.

Again, workers comp is different from liability. Your state/local laws will dictate what coverage you need and if you need it at all.


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## Tessa7707 (Sep 17, 2012)

Right, thank you! 
Those instructors definitely cannot afford their own insurance policy. It's about $750 a year in Ca. That's what they would need to be 'independent contractors'. 
Also, if it came down to it, they would look a lot more like employees than independent contractors. The instructors would be following my curriculum, I'd be setting up scheduling, clients are looking for instruction from my riding academy. It's just too close to try to skirt out of workers comp. 
CA is ridiculously legalistic when it comes to anything like this. I do know I will need workers comp for any amount of hours worked. Thank you.
I got a lead on going to 'State Fund' and requested a quote. So we'll see where it goes!


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## Tazmanian Devil (Oct 11, 2008)

Tessa7707 said:


> Right, thank you!
> Those instructors definitely cannot afford their own insurance policy. It's about $750 a year in Ca. That's what they would need to be 'independent contractors'.
> Also, if it came down to it, they would look a lot more like employees than independent contractors. The instructors would be following my curriculum, I'd be setting up scheduling, clients are looking for instruction from my riding academy. It's just too close to try to skirt out of workers comp.
> CA is ridiculously legalistic when it comes to anything like this. I do know I will need workers comp for any amount of hours worked. Thank you.
> I got a lead on going to 'State Fund' and requested a quote. So we'll see where it goes!


A few other things...

I am in NY, so fully understand how complicated and technical the rules are for these things. I was not suggesting trying to get around or bend the rules, merely taking advantage of them when they can work in your favor.

I don't believe there is such a thing as someone getting workmen's comp insurance for themselves. Maybe CA is different. While high, I believe that the $750 would be for the workers own liability insurance.

If you are talking about liability insurance, then it should be fairly simple and much less expensive than $750/person to add people to your current policy. Since you mention already teaching lessons at your own riding academy, your facility should already have a policy. Check with your current agent first to find out what they can do. They are generally also well versed in the local requirements and minimums.

Workers comp protects the worker with benefits paid to the worker. Liability insurance protects and pays benefits to people injured by the worker.

Workers comp is a whole different animal and not one that the worker has the option of purchasing themselves. If your situation requires workers comp, you will need to purchase that. If your academy has a paid worker(s) now you probably already have workers comp (or are supposed to). That policy should cover all employees, including the new instructors (although increasing the number of employees will probably increase your premium).

Rules for what determines independent contractor status vary by state. There are usually very clear rules for this. Again, I am not suggesting breaking the rules. However, it certainly doesn't hurt to check with a professional to see what options are available to you.


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## stevenson (Sep 12, 2011)

Workers Comp Ins, is deducted in payroll taxes in CA. If you are being above board then you have an employer tax id #, and deduct all related taxes soc sec, state, federal , work comp
in the payroll/ pay check. 
If you are looking for Medical coverage (health ins) for an employee try an individual or small group policy with BC BS Kaiser etc.
There are a lot of companies that will not cover CA because there are few laws to protect property owners and fewer to protect livestock owners.


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## Tessa7707 (Sep 17, 2012)

Tazmanian Devil said:


> A few other things...
> 
> I am in NY, so fully understand how complicated and technical the rules are for these things. I was not suggesting trying to get around or bend the rules, merely taking advantage of them when they can work in your favor.
> 
> ...


I realize workers comp and liability are entirely different. 
In order for the new instructors to be independent contractors, where I am not required to have workers comp, the instructors would need to purchase their own liability policy, which is about $750.
I do not own the facility, just the academy. 
My current policy, yes, covers employees. However, I need a worker comp plan in order to have employees, and I am having trouble finding a company that does that in Ca.


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## Tessa7707 (Sep 17, 2012)

stevenson said:


> Workers Comp Ins, is deducted in payroll taxes in CA. If you are being above board then you have an employer tax id #, and deduct all related taxes soc sec, state, federal , work comp
> in the payroll/ pay check.
> If you are looking for Medical coverage (health ins) for an employee try an individual or small group policy with BC BS Kaiser etc.
> There are a lot of companies that will not cover CA because there are few laws to protect property owners and fewer to protect livestock owners.


Is it really? Ok, that changes things. Is 100% deducted from the employees paycheck or just a percentage? What does 'above board' mean?
I'm currently sole prop. So my tax ID is my SSN. Do I need to get something separate for an employer tax ID #? Not looking for health ins. Just need to be legal in hiring employees.


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## Tazmanian Devil (Oct 11, 2008)

Tessa7707 said:


> I realize workers comp and liability are entirely different.
> In order for the new instructors to be independent contractors, where I am not required to have workers comp, the instructors would need to purchase their own liability policy, which is about $750.
> I do not own the facility, just the academy.
> My current policy, yes, covers employees. However, I need a worker comp plan in order to have employees, and I am having trouble finding a company that does that in Ca.


I misunderstood. The way it was written, it appeared to me you were looking at workers comp and liability as the same thing.

Around here, trainers can be added on to a school's liability policy without hiring them as formal employees and all the other problems it entails (such as worker comp and benefit packages).

Also, while many programs operating out of a barn have their own liability insurance, they also usually get added onto the property owners insurance. In some cases this can end up covering the program's instructors without the program or instructors needing to buy the insurance. Maybe you can't do that in CA either - and I always though NY was the worst for petty rules.

You say you are an equine teacher, are hiring more teachers and are a sole proprietor? I'm not a lawyer, but let me highly suggest you look at incorporating or going LLP. You are currently subject to more personal liability that you need to be. A Corp or LLP setup is much less expensive than you may think it is.

As to what Stevenson mentioned about "above board" it is what people also call "on the books." That means when you pay them you are deducting Social Security, Medicare, Federal Withholding, State, Local and any other applicable tax. You are also filing out the forms, filing them and paying those taxes to the appropriate agencies. Then you are providing W-2 and/or 1099s to the employees at the end of the year. Not all these taxes are only deductions from employee pay - some, like SS also require the employer to pay a portion.

Payroll is a real PITA. Lot's of paperwork to do it right. Most companies contract it out and/or let an accountant handle it. Check out a service like ADP or ask the person who does your taxes. This is why I suggested looking at the "contractor" route, which is how most places around here handle it. Unfortunately, that doesn't seem to be a viable option in your area.


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## bsms (Dec 31, 2010)

A lot of local bar associations have a referral service. In Pima County AZ, a $35 payment gives you 30 minutes to talk with a lawyer who specializes in your area. I strongly recommend looking into something like that, because legal advice ought to come from someone licensed to practice law in your state.


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## Saddlebag (Jan 17, 2011)

Check the US Equestrian Federation web site. They sell insurance to members at a reasonable rate. Not sure what all it covers, perhaps your instructors would have to join as well.


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## NorthernMama (Mar 12, 2008)

Liability issues are the same whether the op is an individual or corporation when it comes to employees. The shareholders of a corporation are liable for state taxes. In terms of suits, again, it's much the same. If someone sues the corporation and the OP is the major shareholder, making the decisions, they will sue the OP personally as well. 

Still incorporating may be the right financial decision for you. You would need to sit down with an accountant to help you decide that.

Your easiest answer is to ask an accountant to help you set this up correctly. If you aren't going to do that, then call the CA government and ask them to explain to you how to set up the payroll. Yes, you will get another payroll ID number. You may get two - one federal, one state; I'm not sure how that works there. 

I also found this page that has a lot of information: For Employers They also provide a link to a workers comp rating page and insurers for workers comp. I'm not 100% sure that WC is mandatorily deducted from paycheques. From the little bit that I read, it looks to me like WC is the employer's responsibility. If there is something being deducted from an employee's cheque that appears to be WC, I would double check it. Some companies might get an insurance plan that covers WC, LTD, Life, Dental, etc. and only a portion of the premium is deducted.

Payroll can be very tricky, Tessa. Please do your homework.

Ah - actually: brainstorm! It may be easier and more efficient for you to call up a payroll service provider. They can walk you through what you have to set up, then they will crunch the numbers, deposit the employees paycheques and remit to the government departments as well as completing the annual returns! Yes, that is probably the best way to go for you.


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## egrogan (Jun 1, 2011)

Every state has a free Small Business Development Center to help people with these kinds of start-up questions (or can refer you to someone locally if they can't help). I'm sure CA has many regional SBDC offices.

You can either search via the Small Business Administration, or do a google search for "CA + small business development center."

Good luck!
_Posted via Mobile Device_


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## stevenson (Sep 12, 2011)

maybe the better business bureau could direct you to the correct agency. Also with some of the new laws, depending on the # of employees you may have to get health ins.


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## Tazmanian Devil (Oct 11, 2008)

NorthernMama said:


> Liability issues are the same whether the op is an individual or corporation when it comes to employees. The shareholders of a corporation are liable for state taxes. In terms of suits, again, it's much the same. If someone sues the corporation and the OP is the major shareholder, making the decisions, they will sue the OP personally as well.


With all due respect, I would disagree with that - and it has not been what I have been told by many different corporate lawyers over the years. Sure, when someone files suit against a corporation, they will frequently name an individual in the suit as well. Common practice. However, a properly set up LLC or corporation will provide a significantly higher level of personal asset protection than a sole proprietorship. Especially when working in the equine business, this is something that should be carefully considered. This is really something a lawyer should advise on as everyone's situation is unique.

I don't necessarily advocate incorporation, but instead speaking with a professional to understand what benefits and protections it might provide. In my experience, the benefits almost always outweigh any possible disadvantages.


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## NorthernMama (Mar 12, 2008)

Tazmanian Devil said:


> this is something that should be carefully considered. This is really something a lawyer should advise on as everyone's situation is unique.
> 
> I don't necessarily advocate incorporation, but instead speaking with a professional to understand what benefits and protections it might provide. In my experience, the benefits almost always outweigh any possible disadvantages.


Definitely agree with this.


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## codysmom123 (Nov 14, 2012)

stevenson said:


> Workers Comp Ins, is deducted in payroll taxes in CA. If you are being above board then you have an employer tax id #, and deduct all related taxes soc sec, state, federal , work comp
> in the payroll/ pay check.


You CAN NOT deduct workers compensation premiums from employee's paychecks in any state including CA.

*Q. Can my employees help pay for my workers' compensation insurance?*
*A. *No. Workers' compensation insurance is part of your cost of doing business. An employer cannot ask employees to help pay the insurance premium.

From this site: DWC FAQs for employers

Workers Compensation IS NOT a benefit, it is a cost of doing business.


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## stevenson (Sep 12, 2011)

work comp is paid by the employer and shows in the tax area on a pay stub. I did not mean that the employer deducted this from anyones Pay Check.


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## stevenson (Sep 12, 2011)

also, from an accounting aspect , the wc is in with payroll taxes, on the books.


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## churumbeque (Dec 20, 2009)

It sounds as if you are not new to running your business and your CPA should be able to point you in a direction. In Iowa any insurance company can sell you workers comp. which is a policy provided by the state. They set the rates and in Iowa the minimum premium is around 600.00 for about 9K of payroll. It will depend on how they rate your profession on cost.


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