Owner Operators have been used in the moving and storage industry for many years.  However, it has been primarily for interstate work.  In an effort to control expenses, and in some instances avoid costs all together, companies are now using independent contractors for local and intrastate work.    At first it could look like a good move, but you could be facing unexpected liabilities.

One of the benefits of being the “employer” is that workers compensation is the sole remedy for injuries.  Employees can only collect through the workers compensation system and benefits are limited by statute.  When you use contractors, you are not the employer, and are not immune.   It is important that you make sure that the contractors have the proper coverage in place.   The main reason is that, in some states, you are statutorily responsible for injuries to the employees of your contractors if the contractor does not have workers compensation coverage in place. 

But that alone does not eliminate the problem.  You can still be sued for negligence.  Let me give you an example;  A contractor is unloading into your warehouse.  He or his helper is injured.  Perhaps they fell off the dock or tripped over the forklift.  Even though they have coverage for their injuries, they can now sue you.  The burden of proof is greater than under workers compensation because they must prove that you were negligent.  But the payout to them is not limited by statute and they can add pain and suffering.

If you are using independent contractors, take the following steps; 1) make sure they are truly independent.  Calling a employee a “contractor “ does not make it so.  You could be in violation of law and subject to additional costs if they don’t meet the definition of a contractor.   2) make sure they have the proper coverage in place.  You should never use uninsured contractors.   3) If you allow contractors to work at your physical location, you could be subjecting yourself to further, unnecessary liability.  4) Think it through and discuss it with your Risk Manager. 

Florida’s No-Fault Law is changing. The legislature either needed to take action in 2012, or do away with the law entirely. PIP was originally put in place to limit personal injury suits in auto accidents by having the injured party’s own insurance policy cover the first $10,000.

While the new law does not limit coverage, it does limit how you receive it. After being injured in an accident, you must seek medical treatment within 14 days. Treatment must be received from a hospital or ambulance, a physician, osteopathic physician, chiropractor or dentist. For the full $10,000 limit to be available, it must be determined that you have an “emergency medical condition. If not, the medical benefit is only $2,500.

For more information please contact us at ceo@rgvi.com.

We’re All About You

U.S. Department of Labor

Assistant Secretary for
Occupational Safety and Health
Washington, D.C. 20210

October 4, 2010

Dear Employer:

Distracted driving has become an epidemic in the United States, and its often fatal consequences are a threat to your workers, your business and the public.

Because millions of workers’ jobs require them to spend part or all of their work day driving ― visiting clients and customers, making site visits, or delivering goods and services ― the Departments of Labor (DOL) and Transportation (DOT) are joining forces in a campaign to stop distracted driving and save lives.

Year after year, the leading cause of worker fatalities is motor vehicle crashes. There’s no question that new communications technologies are helping business work smarter and faster. But getting work done faster does not justify the dramatically increased risk of injury and death that comes with texting while driving.

The human toll is tragic. DOT reports that in 2009, more than 5,400 people died in crashes linked to distraction and thousands more were injured. “Texting while driving” has become such a prominent hazard that 30 states now ban text messaging for all drivers.

OSHA is partnering with others across government, industry and the public to bring together important information and tools to attack texting while driving and other distracted driver hazards. We invite you to learn more about combating this problem at www.osha.gov and at DOT’s distracted driving website, www.distraction.gov.

Most employers want to do the right thing and protect their workers, and some have already taken action to prohibit texting while driving. It is your responsibility and legal obligation to create and maintain a safe and healthful workplace, and that would include having a clear, unequivocal and enforced policy against the hazard of texting while driving. Companies are in violation of the Occupational Safety and Health Act if, by policy or practice, they require texting while driving, or create incentives that encourage or condone it, or they structure work so that texting is a practical necessity for workers to carry out their job.

To combat the threat of distracted driving, we are prepared to act quickly. When OSHA receives a credible complaint that an employer requires texting while driving or who organizes work so that texting is a practical necessity, we will investigate and where necessary issue citations and penalties to end this practice.

I invite you to join us in observing "Drive Safely Work Week," October 4-8. During this week and throughout the year, let’s work together to prevent workers from being injured and killed on the road.

David Michaels, PhD, MPH

In addition, new workers compensation rates were issued for January 1, 2011.  Most moving companies will not notice any difference.  The rate for driver and labor code 8293 was $10.27 in 2010.   The rate dropped to $9.84 for policies effective after July 1, 2010.  Now the rate will go back up to $10.27 in January. 

Medical Only Claims

In Florida, medical only claims are reduced by 70% when they are applied to a company’s experience modification.  This is a big thing that you should take advantage of.  If you continue paying the employee, you cannot consider it “sick pay”.  It has to be their regular rate of pay. 

My advice is to have regular conversations with the claims adjuster.   In addition to discussing keeping the employee on payroll, you should always know your employees next treatment, whether they can come back to work “full duty” or “light duty”, when the employee will be at maximum medical improvement and whether the employee will have a permanent impairment.    

Another way to impact your experience modification is to work your claims.  By making sure your claims are closed at least six months prior to the end of your policy, you might save money.   Sometimes a claim is only being held open waiting for paperwork to be signed or a release from the doctor. 

Return-To-Work

Many Workers Compensation carriers will require you to have an RTW, or a Return To Work policy.  If is not required, it will make your company more attractive to the carrier and reduce your claims expenses.  The concept is that an employee working is not sitting at home watching personal injury attorneys.  It also reduces the idea that they can get paid for not working. 

As quickly as possible, find out from the adjuster or the doctor if the employee has been released back to work with or without restrictions.  Do not rely on the employee just to bring it to you.   Sometimes they will hold back this information until it is convenient for them.  Always contact the employee after their doctor’s visit to ask them how it went and what the doctor said.

One misconception about RTW is that you have to pay an employee at their same rate of pay.  Not true.  You only have to pay them the rates commiserate with the job they are doing.  For example, if an injured drive is able to sweep out the warehouse, you only have to pay them what you would pay that type of labor.   Sometimes it is hard to find jobs that fit within the injured employee’s restrictions and abilities.  Do what you can and discuss the issue with the adjuster. 

Voluntary Termination

This is somewhat of a new term that workers compensation carriers use for injured employees that hire an attorney.   As part of any settlement, they will require the employee voluntarily resign.  This has many purposes.  First and foremost is that it is not good for an employee who has received a settlement to be around the other employees.  

Some employers have a difficult time with the thought that they are losing a “good” employee.  But remember, this person hired an attorney and sued you.

 Here are two examples:

A Florida moving and storage company was recently fined $14,600 for warehouse violations.  Although this does not come close to the Oklahoma storage company that was fined $114,000, it is still a lot of money.   

In October, a Fort Myers trucking company was charged $125,000 in punitive damages plus having to pay an employee back wages and compensatory costs.  The employee was fired for refusing to drive two vehicles that he considered unsafe.  OSHA ruled the driver’s firing as “retaliation of a whistleblower”.  

Fines are not the only cost companies can face.  In addition being subject to huge fines for reoccurrences, companies have a public record and could be barred from bidding on certain government contracts.  In addition to that David Michaels, the Head of OSHA, recently appeared before Congress advocating increased fines.  

The amazing thing is that most fines do not come from rules you would expect; failure to maintain the OSHA 300A form or using uncertified forklift operators.   They were for requirements that most companies would not even know existed.  As I prepare my clients for the possibility of an audit, I mention fire extinguisher inspections.  I always get the comment “that is not a problem, we have them inspected every year.”  It is a problem because once per year does not satisfy the OSHA guidelines. 

OSHA is going to touch every part of your business where employees are involved.  The time to prepare is not after or during a major accident or after you have been notified that OSHA is going to perform an inspection.  The time to prepare is now.  Rogers, Gunter, Vaughn Insurance has developed a checklist to make it easy for our clients to conform.   Please contact us if you would like more information.  We can help.

This is creating problems for movers.  First, it was never intended that movers would be responsible for items like jewelry.  We could be stuck with a claim for an item we did not even know was a part of the move.  The same goes for items packed by the owners.  Because of this, the Florida Movers and Warehousemen’s Association developed a Bill of Lading / Contract for Service that meets the guidelines set by the State.  The solution was to limit our liability to 60 cents per pound on such items even though the shipper declares a value.  FMWA is sponsoring legislation that would fix the problem, but to date, it has not passed.

My recommendation is to use the new Florida form.  It is available from Milburn Printing at a reasonable cost. 

The second issue has to do with Warehouse receipts.  If you are using an old form, the provisions must not be consistent with your insurance policy.  This is important because you could be liable for damages that your policy won’t cover.  According to our Attorney, Heidi Roth, the Bill of Lading / Contract for Service can be used as a warehouse receipt as long as it includes your monthly storage rate.  The other benefit of this is that you will only need to order one document.  You could than attach your inventories to it.

While this machinery is covered by property policies, the business owners still face problems and expenses.  Costs include the property policy deductible and the prospect of higher insurance rates in the future.  The most immediate problem is the discomfort to you and your staff while arrangements for repairs can be made. 

So how do we keep from being a victim?   The key is to discourage someone from targeting you.  Take a critical eye to the area around your units.  Are they in an area where they are inaccessible or so visible to neighbors that it would be difficult to steal them without being seen?   You need to make it as difficult as possible for the thief to work.  I am being told that when the copper is cut, it creates a huge Freon cloud, so dense that it takes several minutes to settle and the unit can be seen.  For this reason, many believe the thefts are happening at night.  

There are commercial products available such as a coolant sensor that sets off an alarm when the refrigerant escapes quickly from the system.   Cages can be purchased to encase the units.   Cameras can be installed.  A locked fence can be erected around the unit, but must be high enough to make it hard to lift the unit over the top.  In talking with a large HVAC contractor, he suggests securing your pad to the ground and the unit to the pad with bolts that can not be cut.  Thieves can still rip the unit apart and take the copper, but this is cheaper to replace than an entire unit. 

The first step the culprit takes in stealing a unit is to cut off the power to the unit.  If they can’t do that, they will typically leave the unit alone.  There is usually a power disconnect located near the A/C unit.  If it does not have a cover, you should be able to lock the switch in the “on” position with a good lock.  If your power box has a cover, your burglar alarm provider might be able to install a relay that would trigger the alarm company when the cover is opened.   Don’t rely on locking the box cover if the covered can be unscrewed.

One day I noticed that the air conditioner units on the Florida Lottery building have cameras protecting them.  Here is a government entity that has raised four billion dollars for education and they are worried about losing their units.   Anything that you too can do to discourage a thief will help.