Legal Question in Workers Comp in California
After 17 years of being an employer I had someone file a workers comp case that was completely fraudulent. He collected max settlement & now my rates have forced me to close my doors. I need to restructure my company so that I can erase my workers comp ex mod. Can you tell me what I need to do? I currently own 49% of the company, my partner holds the contractors license holds 51% ownership in the company.
2 Answers from Attorneys
1) if the case was fraudulent, then you should have reported it to the district attorney in the county where the event occurred.
2) it is almost impossible to provide information regarding ways to restructure your company if you do not provide a statement regarding structure. At this point you might consider a limited liability partnership with a different name. As long as your credit is good, you should be find. Additionally, you might seek a consultation with a business law attorney. Lastly, shop around for a comp. carrier. Everyday new firms are entering the market to provide comp insurance in California, so shop around and get the best deal you can.
Check with some of the comp. carriers as to what situation results in lower rates. As a new business, you may end up having to pay higher rates then one with one injury in 17 years. If you reduce your staff and use actual outside contractors [and not just give them a new name], that will reduce your rates but the outsider contractors may cost more than the reduction in rates.
You should speak to a busiess lawyer. but remember that if the adjustment in your experience rating and thus premiums was enough to force you out of business then your profit margin were too low and the business might not be worth restarting.