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 71 
 on: January 17, 2014, 12:20:59 PM 
Started by beancounter - Last post by beancounter
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Here's a good resource on You must login to view links.
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Entity Types
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 72 
 on: January 17, 2014, 11:18:03 AM 
Started by beancounter - Last post by beancounter
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Be sure to check out the Bureau's new You must login to view links.
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Classification Search
function released yesterday.

 73 
 on: January 16, 2014, 09:40:51 AM 
Started by Irish_Friar - Last post by Irish_Friar
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When auditing Multi-State Workers' Compensation Insurance policies that include ND, OH, PR, WA and WY we are instructed to not exclude any of the normal exclusions such as premium overtime, severance etc for these particular states. Also, is there something in writing that addresses this situation?

Do all carrier handle it this way?

Regards!

 74 
 on: January 07, 2014, 06:11:09 PM 
Started by beancounter - Last post by beancounter
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 75 
 on: November 20, 2013, 04:29:18 PM 
Started by beancounter - Last post by beancounter
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I have more information regarding "closely held" or "close corporation"...I'll post it tomorrow.

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 76 
 on: November 20, 2013, 04:26:53 PM 
Started by beancounter - Last post by beancounter
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In California, a corporation historically has been referred to as a “close corporation” or “closely held” when its shares are not publicly traded and are held by a single shareholder or closely-knit group of shareholders who are active in conducting the corporation’s business.  In this context, the term “close corporation” is merely descriptive and has no legal significance. 

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"close corporation"
is also a legal term defined in You must login to view links.
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§300 of the California Corporations Code
, and requires completion of You must login to view links.
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Form ARTS-CL
and identification as such in the Articles of Incorporation.  A Statutory Close Corporation cannot have more than 35 shareholders. 

For our purposes, an insured does not need to be a Statutory Close Corporation in order to be closely held; and, in some cases, a Statutory Close Corporation may not be closely held (i.e. if any non-officer/director owns shares).

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to have on this subject.  I included a note which defines the non-legal term "closely held" as meaning 100% of the stock is owned by officers and/or directors which is based on California Labor Code §3351:

…where the officers and directors of the private corporation are the sole shareholders thereof, the corporation and the officers and directors shall come under the compensation provisions of this division only by election…

So, whether they are a Statutory Close Corporation or not, if any stock is owned by non-officers/directors the corporation is not closely held for workers’ comp purposes and, therefore, no one can be excluded.  Also:

•   There’s no limit to the number of officers/directors for our purposes (however, the more officers, the less likely it is going to be closely held). 
•   The shareholders do not have to be active, but they do need to be officers or directors per the Corporate Charter or the Corporate Minutes:
>   Completely inactive officers/directors who are unpaid do not have to be listed on the exclusion endorsement in order to be excluded (no minimum would be applied; director’s fees reported on 1099’s are not considered payroll).
>   Active and/or paid officers or directors need to be endorsed for exclusion.
>   Included directors are not subject to officer minimum/maximum payroll limitations – they are included at their actual pay.

Sheesh!  Can California make things any more complicated???

 77 
 on: November 16, 2013, 09:42:19 AM 
Started by beancounter - Last post by beancounter
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In CA, only manager members can be excluded by endorsement per Labor Code section 3351(f).  LLC members who are not managers cannot be excluded by endorsement.
Quote
   (f) All working members of a partnership or limited liability
company receiving wages irrespective of profits from the partnership
or limited liability company; provided that where the working members
of the
partnership or limited liability company are general partners
or managers, the partnership or limited liability company and the
partners or managers shall come under the compensation provisions of
this division only by election
as provided in subdivision (a) of
Section 4151. If a private corporation is a general partner or
manager, "working members of a partnership or limited liability
company" shall include the corporation and the officers and directors
of the corporation, provided that the officers and directors are the
sole shareholders of the corporation. If a limited liability company
is a partner or member, "working members of the partnership or
limited liability company" shall include the managers of the limited
liability company.

Many times, LLC members are inactive and not paid so they will not be included on the audit...but they cannot be added to the exclusion endorsement.  Managers and members are identified in the Articles of Organization.

An LLC with both manager members and members who are not managers can still exclude manager members...it is not similar to a corporation in that respect.  This is because the Labor Code governs who can be excluded (the USRP only governs the classification and minimum/maximum payroll limitations for those who are included).  The Labor Code requires a corporation to be closely-held for officers/directors to be excluded:
Quote
3351(c) All officers and members of boards of directors of
quasi-public or private corporations while rendering actual service
for the corporations for pay; provided that, where the officers and
directors of the private corporation are the sole shareholders
thereof, the corporation and the officers and directors shall come
under the compensation provisions of this division only by election

as provided in subdivision (a) of Section 4151.

Labor Code section 3351(f) does not have a similar requirement for partnerships or LLC's.

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Exclusion of Officers, Members of LLC, General Partners, etc.
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Why only LLC Managing Members can be excluded
.  I have more information regarding "closely held" or "close corporation"...I'll post it tomorrow.
I hope this helps Smiley

 78 
 on: November 01, 2013, 02:45:47 PM 
Started by NickDin - Last post by NickDin
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If an LLC has one managing members and and has non-working members that are investors in the LLC, can the managing member be excluded?

We are arguing this point with an underwriter who feels that the managing member cannot be excluded as some of the members are non-working.  We pointed to Labor Code section 3351(f), but the underwriter is sticking to his guns on including the managing member.

Any input would be appreciated.

 79 
 on: October 24, 2013, 01:10:00 PM 
Started by beancounter - Last post by beancounter
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Search the You must login to view links.
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CA Code of Regulations
here.

 80 
 on: September 04, 2013, 01:04:57 PM 
Started by beancounter - Last post by beancounter
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According to the You must login to view links.
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Workers’ Compensation Educational Association, Inc.

Quote
Independent contractor vs. employee - Only an employee of the employer has the right to maintain a claim for benefits.  See MS. Code Ann §71-3-3(d) and 71-3-7.  In general terms, a claimant is found to be an employee if the employer has the right to control the work activities of the claimant or, if that is unclear, the nature of the claimant’s work is an integral part of the work of the employer.  Employees of an uninsured subcontractor are considered the “statutory employees” of the general contractor for whom the sub-contractor was working at the time of the injury.  See MS. Code Ann §71-3-7.


It sounds like they are employees to me, but to be sure you should gather more information:

  • Who supplies the tools and equipment?  If the insured supplies, this indicates employee status.
  • Do the workers perform excavation for other customers?
  • Are the workers You must login to view links.
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    licensed
    ?
  • Do the workers carry General Liability insurance?
  • Do the workers advertise their services?
  • Does the insured reimburse the worker for any expenses?

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