Insurance on Employees?

Discussion in 'Business Operations' started by lasher66, May 9, 2002.

  1. lasher66

    lasher66 LawnSite Senior Member
    Messages: 399

    I currently work alone doing about 45 lawns a week and I was wondering what kind of insurance and what is all involved with hiring another person or two so I can expand a little bit. What kind of prices do you guys pay? Is the insurance different than workmans comp? Thanks for any help.

  2. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    You carry GL insurance for the business which insures you against their accidents.

    You have WC insurance - if they injure themselves on the job, WC pays the medical and time off if necessary (after 2 wk wait in OH).

    Other taxes, etc. you should consult with your accountant. They'll set you up with all that you need to do. Or a payroll service can do it for you as well.

    Pay is up to what you're asking the person to do. What kind of money will they make for you? If you can only bill them out for $30,000 per year, it will be tough to keep 'em employed full time at $10 per hour. You've got to make more money with them. How many hours will they work each week? Each season/year? If they work 1500 hours a season, and you can pull $40.00 per hours, or $60,000 per year, you can pay them $8 to $12 per hour depending on how much supervision they need. In some markets, $10.00 to $12.00 is starting laborer rate. In other markets that is entry level foreman pay.

    Check out what the market is paying for various types of positions. You'll pick it up after hiring five guys for $7.00 an hour, that you get what you pay for. But beware, some guys aren't worth the $12 or $14 an hour they got paid at their last job or what they want to make. Call their previous employers and ask how long they made $xx and why they left. They may have just went from $9 to $11 an hour a month before he got laid off - so don't let it fool you into thinking that because what they got paid on their last job is what you have to pay them. Do your research, try them out and see if you can make money on them - make sure your numbers work out.
  3. Mid Rivers

    Mid Rivers LawnSite Member
    Messages: 209

    Do not make any assumptions in a new hires abilities

    When I looked into it I would have had to get an Employer ID number and file income tax quarterly (I do not currently do this). You have to pay Social Security tax and Un-employment, and you will have to with hold Federal Tax and State taxes. Good Luck
  4. wolfpacklawn

    wolfpacklawn LawnSite Member
    Messages: 120

    there are many hassels that come with employees but if you ever want to make real good money you are going to have to have them.

    workers comp ins. is probably about $700-1000 per full time employee per year, that's what I pay anyhow. I know that this can vary depending of the area of the county. Ohio may be higher or lower. Call your insurance broker and have him give you a quote.

    you will have other state and local taxes - like unemployment. for me that's only about $100-200 per year

    also add 7.65% to their hourly wage for your part of their Social Security and Medi. In case you didn't know, as an employer you have to match the 7.65% that you take out of their paychecks. So you have to send in 15.3% plus federal income taxes that you withhold from their paycheck.
    Meet with an account and they will be able to help you with more exact #'s for your area. They also will know all the various govt. agencies that you will need to report to both federal and local. Dont try to save a few bucks by doing it yourself. Have an accountant get you set up and then once you know everything you are supposed to be doing then do it yourself. I made this mistake when I first hired employees and it ended up costing me $750 for one screw up that I made and on top of that I had to come up with more $ for taxes that I didn't know I was supposed to be paying. I now do all the paperwork myself, but that was only after I learned what to do and how to do it from my accountant.
  5. digger1

    digger1 LawnSite Member
    Messages: 73

    great advice from all. ditto on checking with an accountant about how to set up your "books". uncle sam (a.k.a. I.R.S.) holds the employer responsible for social security and withholdings on taxes of employees. that can even sometimes apply if you have an "independant" third party doing work for you.
    pay a little extra now for advice from an acct. and from an attorney on what your liability is for work/comp since each state sets different minimum standards on number of employees to determine if you are "required" by law to have w/c.
    a little bit of time and effort now may mean the difference between a successful business or a bankrupt business in the future.
    free enterprise is great and good luck with your business!

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