Understanding workers compensation is a four part series written by Bill Stankevitz, senior vice-president of St. Charles, IL based Wine Sergi & Co. LLC.  He has been involved with the insurance industry in many capacities for the last 45 years and invites people to visit his blog “insurance answers for business” at www.mysweethaven.com/blog.

In the final installment of the 4 part series on Workers Compensation, Bill investigates how you as a moving company (or other business) can conduct a self analysis of your policy.

The first option is do it yourself and although it’s important to understand your policy conducting a self analysis with no other help from any professionals can be risky.

Option two is to hire a risk manager to handle this part of your business.  This isn’t an option for medium to small moving companies but option three of hiring an independent consultant can be.  The beauty of option three is reduced cost from option two, and an objective analysis of your moving company’s workers compensation policy.  Option four is have your current workers compensation insurance provider do the study, but since workers compensation commissions are generally low its harder to entice your agent to agree to lots of work for little money.  Another potential problem with option four is its subjectivity. What company is going to steer you away from their own workers compensation insurance products? Option 5 is to have another workers compensation provider (or two) conduct the study as part of the bid process.  Since the carrot of earning your business is their motivation this is a much easier sell.  Also, by getting a couple other quotes you can validate your decision by comparing rates and services.

As we’ve stated before, learn all you can about your options when it comes to moving company workers compensation.  To review the article in its entirety read Understanding Workers compensation (Part IV).  The subject of workers compensation and Moving companies should be understood and reviewed often as the potential costs (or savings) can be significant.

With compliance becoming a bigger issue (CSA 2010, etc) it’s important that moving companies are in line with driver regulations.  Here’s a general idea of classifications for moving company drivers.

Moving Company Drivers That Require a Class D License:

Single vehicle with a GVWR (Gross Vehicle Weight Rating) of less than 16,000lbs. 

This is a company car or probably a vehicle like an econoline van or small box truck with a 12’, 15’, or 16’ box (remember GVWR is the weight designated by the manufacturer as the maximum loaded weight of the vehicle not the empty or “tare weight”).

*Any vehicle with a GVWR or GCWR (Gross combining weight rating)over 10,001 lbs requires the driver to carry a DOT Medical Card.  Anyone who does require a medical card should also have a driver file.

Moving Company Drivers That Require a Class C License:

Single vehicle with a GVWR between 16,001 lbs, and 26,000 lbs.

This is a much larger category that likely includes 16’box trucks up to 24’or 26’ straight trucks (the 24’ & 26’ category can require either a “C” license or possible a CDL B license depending on the GVWR, and how the truck is registered and plated). 

This is very important to know before putting a driver in the truck.

One common misconception is that a Class “C” truck with air brakes requires air brake endorsement, it does not.  The only time endorsements are required is under the CDL program.

Also a “Class C” license can be obtained at any secretary of state facility (not just the special CDL facilities).

Drivers in this class are not required to be in the random drug testing pool but are required to have a DOT medical card and driver file.

Moving Company Drivers That Require a CDL B license:

Single vehicle with a GVWR of 26, 001 lbs or such a vehicle that tows a trailer less than 10,000 lbs.

This category is generally 24’-28’ straight trucks that are registered and plated to carrier heavier loads.

This vehicle requires passing of the pretrip inspection test, the basic control skills exam, and the road test or driving exam.

A driver obtaining a CDL B must have a passing pre-employment drug screen and be part of a random drug and alcohol testing program.

Drivers in this category are required to have a driver file with specific background checks for their previous 10 years of driving employment.

Moving Company Drivers That Require a CDL A:

Combination vehicles (commonly known as tractor-trailers) with a GCWR of 26,001 if the trailer being towed is more than 10,000 lbs.

All other qualifications and compliance issues are the same for CDL B and CDL A drivers.

Many of the questions related to the moving company driver qualifications can be answered in the Class C or CDL study materials.  The FMCSA (Federal Motor Carriers Safety Administration can be contacted at www.fmcsa.dot.gov, and 1-800-832-5660 for verification of driver qual laws related to moving company drivers.  If in doubt, double check the regulations.

 Understanding workers compensation is a four part series written by Bill Stankevitz, senior vice-president of St. Charles, IL based Wine Sergi & Co. LLC.  He has been involved with the insurance industry in many capacities for the last 45 years and invites people to visit his blog “insurance answers for business” at www.mysweethaven.com/blog.

In part three, the six components of how premiums are set is covered.  It references the regulations specific to Illinois so check with your state to see if these rules apply to you.  In any case, these are areas that can potentially help moving companies or other businesses in other states save money on premiums as well.

A contractor’s credit can affect the policy in certain cases and the premium “discount” amount can change between different insurance companies and different states by as much as 7%.  Excess limits charges as related to umbrella liability coverage is covered as well as the terrorism catastrophe components of premium calculation.

Overall the message in this article, I feel, is find out the specifics from your workers compensation insurance agent on what components make the premium calculation process.  Don’t blindly give payroll information and accept whatever premium you get without understanding how the process works.  As with everything else, the more you know the better decisions you can make and the more money you can save.  How workers compensation affects a moving company can be managed and adjusted with some homework and proper decision making.  Always consult a professional.  To read this article Understanding Workers Compensation Part III.

Understanding workers compensation is a four part series written by Bill Stankevitz, senior vice-president of St. Charles, IL based Wine Sergi & Co. LLC.  He has been involved with the insurance industry in many capacities for the last 45 years and invites people to visit his blog “insurance answers for business” at www.mysweethaven.com/blog.

In part two, bill covers the experience modification (or Mod).  The mod is set by the NCCI (National
Council on Compensation Insurance) and determines whether a company has a below average, average, or above average loss history.

Depending on what the “mod” is determines the company’s annual workers compensation premium.  Once workers compensation underwriters set what a company will be charged for their annual premium, that number is then multiplied by their “mod”.  For instance, if a small moving company gets a premium quote for $40,000 in annual premium, the mod can make the actual premium fluctuate greatly.  A mod of .8 means the premium will be $32000 or .8 x $40,000.  However, a company with a higher mod (due to loss history) like 1.3 will pay $52,000 or 1.3 x $40,000.  So you see, the premium for like sized companies can vary greatly ($20,000 in this case) due to a difference in loss history (and higher mod).  This can be a huge expense or savings for a moving company (or any other business).  Bill goes on to explain how the formula for calculating the mod is quite complicated and that there are ways a company can potentially help improve their mod with certain practices.  Moving companies and workers compensation insurance can be a frightening topic but if you would like to learn more, read Understanding Workers Compensation Part II.  The stakes are way too high to not understanding this part of business fully.

 The new health insurance reform package (Affordable Care Act was enacted on March 23, 2010) includes an immediate tax break for qualified small businesses: the Code Sec. 45R small employer health insurance tax credit.  Qualified moving & storage companies (other companies and non-profit organizations may qualify for some or all of this credit) may reduce the cost of providing health insurance to their employees this year through the year 2013. The tax credit is retroactive to January 1, 2010.  You may have received a postcard from the IRS announcing this tax credit.

 Small Employers

Employers that have no more than 25 full-time equivalent (FTE) employees paying wages averaging less than $ 50,000 for each employee per year qualify for this tax break.  To determine eligibility for the credit, you have to calculate the number of FTEs and the average annual wages.  See the applicable descriptions for these calculations later in this article.  Also see the 3 Simple Step worksheet developed by the Internal Revenue Service as part of this article that will help determine if you may qualify for this credit.

 Family Members

Since many moving & storage companies are family owned, it is important to point out some limitations in this tax credit:

1. Generally, a sole proprietor, a partner in a partnership, a shareholder owning more than two percent of an S corporation, and any owner of more than five percent of other businesses are not considered employees for purposes of the credit. Thus, the wages or hours of these business owners and partners are not counted in determining either the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit.
2. A family member of any of the business owners or partners or a member of such a business owner’s or partner’s household, is not considered an employee for purposes of the credit. Thus, neither their wages nor their hours are counted in determining the number of FTEs or the amount of average annual wages, and premiums paid on their behalf are not counted in determining the amount of the credit. For this purpose, a family member is defined as a child (or descendant of a child); a sibling or step-sibling; a parent (or ancestor of a parent); a step-parent; a niece or nephew; an aunt or uncle; or a son-in-law, daughter- in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.

 Tax Credit Amount

The maximum tax credit is 35% of the qualified health care premiums paid by the employer for its employees.  However, the moving & storage company must pay premiums for each employee enrolled in health care coverage offered by the employer in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the coverage to qualify for the credit. The credit is subject to phase-out rules.  The credit is reduced by 6.667 percent for each FTE in excess of 10 employees.  The credit is also reduced by four percent for each $ 1,000 that average annual compensation paid to employees exceeds $ 25,000.  This means that the credit completely phases out if the moving & storage company has 25 or more FTEs and pays $ 50,000 or more in average annual wages.

 There are some other limits that apply to the amount of the premiums paid that can be considered for this credit. These limits may be determined by the Department of Health and Human Services (HHS).

Employees (FTE)

This is determined by dividing the total hours of service (including paid time off) for all employees (but not more than 2,080 hours for any employee) by 2,080.  The result, if not a whole number, is rounded to the next lowest whole number.  The 2,080 hours comprise the number of hours in a 52-week period assuming a 40-hour work week.  Any hours beyond 2,080, such as overtime hours, are not taken into account when calculating FTEs.

 Average Annual Wages

This is determined by first dividing the total wages paid by the moving & storage company to employees during the year by the number of FTEs (calculated per above) for the year. The result is then rounded down to the nearest $ 1,000 (if not otherwise a multiple of $ 1,000).  Remember to exclude from the total wages any wages paid to an employee for hours in excess of 2,080.

 Example of Moving Company Receiving Credit

Moving & Storage Co. with 12 employees in 2010:

            Employee Class           Number              Wages

            Drivers                             2                   $   60,000

            Helpers                           5                   $ 100,000

            Warehouseman               2                   $   45,000

            Dispatcher                      1                   $   35,000

            Salespersons                   2                   $   60,000

            Owner/Family                N/A                   N/A

            Totals                          12                   $ 300,000

Average Wage per Employee                         $ 25,000

 Employee Health Care paid by Company      $ 72,000

 2010 Health Care Credit @ 35%                    $  25,200

 Claiming the Credit

The credit is a general business credit that will be claimed on your annual income tax return.

 Investing in business assets or employees is never just a matter of taxes.  Please consult with your tax advisor before acting on this topic.  Your tax advisor can ensure you receive the maximum tax benefits considering your company structure, income tax rates, etc.  You can also visit the Internal Revenue Service web site http://www.irs.gov/ for more information on this issue.

 Thomas L. Broderick, C. P. A. is the Treasurer of Pickens-Kane Moving & Storage Co. in Chicago, Illinois. He has served as Chairman of the Board of Trustees of the Illinois Movers’ and Warehousemen’s Risk Management Trust since 1996. Many individuals, small businesses and non-profit organizations consult him for various accounting, investment, insurance and tax issues.

ADDENDUM A

3 SIMPLE STEPS

If you are a small employer (business or tax-exempt) that provides health insurance coverage to your employees, determine if you may qualify for the Small Business Health Care Tax Credit by following these three simple steps:

1 Determine the total number of your employees (not counting owners or   family members): 

            Full-time employees: _____________________________

            (enter the number of employees who work at least 40 hours per week)

+

            Full-time equivalent of part-time employees: __________________________________

(Calculate the number of full-time equivalents by dividing the total annual hours of part-time employees by 2080.)

            = ______________________ total employees

            If the total number of employees is fewer than 25 GO TO STEP 2

2   Calculate the average annual wages of employees (not counting owners or family members):

            Take the total annual wages paid to employees: ______________________________

÷

            Divide it by the number of employees from STEP 1: ___________________________

            (total wages ÷number of employees)

            = ______________________ average wages

            If the result is less than $50,000, AND

3   You pay at least half of the insurance premiums for your employees at the single (employee-only)

            coverage rate, then

→→  you may be able to claim the Small Business Health Care Tax Credit.  Find out more information at IRS.gov.

Understanding Workers compensation is a four part series written by Bill Stankevitz, senior vice president of St. Charles, IL-based Wine Sergi&Co. Llc.  He has been involved with the insurance industry in many capacities for the last 45 years and invites people to visit his blog “insurance answers for business” at www.mysweethaven.com/blog.

Moving companies and workers compensation insurance have always had an important (yet stormy) relationship so the more a mover understands about workers compensation, the better off they are.  This series of articles can help.

In part one, Bill reviews a time line of the birth of workers compensation and gives an explanation of  it’s intended areas of coverage for medical care, compensation for lost wages during recorporation, and settlement for permanent and temporary (full and partial) disabilities.  The compensation for the above mentioned areas were and are intended for work-related injuries (and illness).

The article explains that there are different ways that states can operate their workers compensation program including exclusive monopolistic funds, competing funds and for most states purchase of workers compensation insurance from an approved private insurance company.

In recent years independent contractors (1099 workers) have become a hot topic with both the IRS and workers compensation insurance underwriters because of a company’s premium amount and rating (which greatly affects premium amount) can be swayed by the inclusion of independent contractor compensation as employee wages.  That is why the subject is so important to businesses because of the huge ramifications and expense workers compensation premiums can have.  Even small businesses can be affected by tens of thousands in premiums in a single year. 

The next part of the article concentrates on classification of employee and accuracy.  It covers how premiums can vary greatly due to what is reported to the workers compensation insurance company and how the NCCI (National Council on Compensation Insurance) rates a company.  To read more on the initial exploration of what workers compensation is read (Understand Workers Compensation Part I) in its entirety along with the other 3 articles in the series to get a better grip on this important part of  businesses.

It has been brought to our attention, there are several emails that are in the circulation and an ad on  Craig’s List by someone using the identity of a legitimate moving company trying to sell a vehicle.  The actual company, Absolutemovingandstorage.com  has nothing to do with the emails, it’s a scam.  One of the scam emails or postings tell of an individual or couple that lost their son in Iraq, in combat.  They are trying to sell his vehicle for $4000.00 (including shipping) to offset debts and expenses, etc.

The scammers ask potentail purchasers to send a moneygram or wire funds in the amount of $4000.00 and once received Absolute-Moving.net will guarantee delivery.  Everyone PLEASE BE ON THE ALERT!  This is a moving scam.  Do not release any banking information, do not send any money, NO VEHICLE IS GOING TO BE DELIVERED.  The people responsible for this scam are most likely outside the U.S. so the chance of catching them or recovering any transferred money is near zero. 

Please review  the sample email below of what is being sent to people.  There is another email being sent (mentioned above) about a couple’s lost son.  The number listed does go to the actual moving company but the mover has nothing to do with the scam and has no knowledge of any delivery.  Everyone should become familiar with the article to see how the scam works.  Any questions, comments, or input regarding this scam or others should be sent to support@emovingstorage.com.  The original person who  received this informations name has been deleted for protection of their identity.

Dear (Name not published to protect the email recipients identity)
>  
> We suggest that you print this page for future references
>  
      
> Transaction # 74832021977  Description: 2007 BMW M6 Registered by: Anthony Garcia
 
> Details:
> ====================================
> Vehicle Description BMW 2007 BMW M6 
> Tracking # 1IL852E8BCPTERZPQ
>  
> Shipping:  Paid     
> Taxes:  $0 
> Total:  $4,000.00
> ====================================
>
>     
> Delivery address:
> ====================================
> Full name: this information has been deleted to protect the recipients information
> Street:
> City: Elizabeth
> State: NJ
> Zipcode: 07208
> Country:  USA
> ====================================
>
>
> How it works:
>
> 1. The buyer and seller agree to use the Absolute Moving & Storage © for payment transfer.
> 2. The buyer transfer the funds to Absolute Moving & Storage © in order to begin the shipping procedures and take the vehicle of the market. The funds should arrive at Absolute Moving & Storage © within 2 business days.
> 3. Upon receipt of the funds, Absolute Moving & Storage © notifies the seller that the funds are on hand with Absolute Moving & Storage ©
> 4. Absolute Moving & Storage © ship the vehicle , a tracking number will be provided to the buyer.
> 5. After the buyer has inspected ( 5 business days ) the vehicle and agreed to buy it, Absolute Moving & Storage © sends the funds to the seller and takes care for the buyer of the paperworks and title transfer that needs to be done for registration
> ====================================
 
> $4,000 money order must be made through MoneyGram ( Same-Day service ) to our company Lawyer`s name and address:
>
> Name: Brandon Anderson
> Street: Service Rd.
> City: Selma
> State: NC
> Zipcode : 27576
> Country : USA
> ====================================
> Note: Our Lawyer is directly involved in this transaction because Mr.Garcia have paid for title transfer service.
 ====================================
>
> Once your MoneyGram same-day transfer is completed please reply this email to and provide the following information:
>  
>  
> – MoneyGram Sender’s full name, address, city, state, zip and phone # (that person who completed the MoneyGram transfer)
> – The MoneyGram Reference Number  ( 8-digit number located on your confirmation receipt)
> – Total amount transferred
>  
> ====================================
> 
  
> Moneygram is a money transfer service. You can essentially send cash to another person or business.
> How MoneyGram works:
> 1) Go to a MoneyGram Agent location (currently there are more than 25,000, including all 3.400 Wal-Marts) and complete a short form ( MoneyGram same-day service ) with your information and the recipient’s information ( our Lawyer`s full details )
> 2) MoneyGram agent will process your transaction and give you a 8 digit reference number
> 3) Money have been sent!
>  

>
> Please confirm your phone # , We will call you to confirm your address and discuss accessibility.
> If accessibility is limited the driver may suggest meeting at a local supermarket or mall with ample space to unload your car.
> Your car will be transported on an 8 or 10-car hauler, the same type of trucks used to deliver new cars to your local dealerships.
> These trucks are 75 to 80 feet long and are almost 14 feet high. Therefore they are very hard to maneuver and are restricted to main roads that do not have any overhanging trees or low clearance bridges.
> Our drivers will call you the morning of your delivery date to give you a three-hour block of time during which your delivery will be made.
> This call also confirms to us that you will be available to receive the delivery on the scheduled date. If you are not home when we attempt to make your delivery on the scheduled delivery date, we will help you reschedule your delivery for the next available date.
>  
>  
>  
>
>  
>  
> Please save/print this email for your records
> If you have any question, please do not hesitate to contact us>
>  
> Email:
> Support@Absolute-Moving.net
> Phone:
> 800-549-4578
>  
>  
>
>
>
>

Whether you own a moving company, manage a moving company, or work for a moving company, there are some things you can do to make your company more “green”.  Many of the following tips are not only environmentally friendly; they can provide a cost savings too.

 BIODIESEL

 If possible use biodiesel or a biodiesel blend in your diesel trucks.  It lowers carbon emissions and comes from renewable sources (different types of processed vegetable oil).  To read more about it, visit www.biodiesel.org for more information about biodiesel and characteristics, locations where you can purchase biodiesel, etc.

PAPERLESS INVOICING:

Paperless invoicing is a practice that can work well for a process like recurring storage and speed up receivables at the same time.  When someone comes into storage (the mover) can keep a credit card number on file and on the date storage is due, charge the credit card, and email a confirmation or paid invoice to the customer.  This not only gets you paid faster, you save paper for invoices, envelopes, postage and the labor to stuff the envelopes.

GPS DEVICES OR MAP BOOKS

You can save a great deal of paper if you don’t print maps for every job, every day.  It may not be popular with drivers right off the bat, but by issuing them a map book or providing them with a GPS device the paper savings can be big.  Even if you check the GPS devices out (like a library book) or purchase them for the drivers and let them take the units home (and be responsible for them), it can not only save paper, but save the office labor involved in generating maps.  With the reduction in paper, you can purchase recycled paper (which may be a little more expensive) and be “green” without costing the company more.

RUBBERBANDS VS. TAPE

On the trucks, instead of using tape to secure pads on furniture, use rubber bands.  Road drivers and owner operators often do this to save money, but since tape is a disposable, and not reusable product using rubber bands can reduce the amount of garbage you generate.  Even small movers use 3-5 36 roll cases per week, so it’s definitely is an opportunity area to be “greener” and save money.

 PLASTIC OFFICE TOTES/MOVING CRATES

The purchase of plastic office/household moving crates for use on moves instead of all corrugated boxes can be an environmentally friendly supplement to your typical corrugated box stock.

 RECYCLING USED CARTONS

Call customers after you move them, to see if they would like you to pick up their used cartons they’d like to dispose of.  It’s good as a customer service follow up and you can provide used cartons at a discounted price for new customers (and reduce garbage).

DUMPSTERS

Make sure you have a regular dumpster for regular garbage and a recyclable dumpster for paper, corrugated, and plastic stretch film, etc.   It’s an economical alternative to one large dumpster and dramatically reduces “land fill” type garbage.

THINK TANK

Have a contest with all employees to come up with “go green ideas” with prizes and the top idea to be implemented by the company.  This approach can be not only “green” but a good team builder.

“Going Green” is a hot topic and important for all of us.  These tips can help your moving company be more environmentally friendly.

.

When inquiring about how to become a household mover in Illinois, there is a very helpful step by step article from the Illinois Movers and Warehouseman’s Association (IMAWA) you can read http://www.imawa.com/imawa/wannabe%20brochure.pdf.    It gives general tips like the suggestion of getting a transportation attorney who specializes in the process to specifics like the application fee, and information about  the required knowledge test from the Illinois Commerce Commission.  It gives a list of requirements (in order) with a brief explanation on the subject.  This will give any potential applicant the approximate cost and time table involved with the intrastate household mover licensing process. 

It also gives some tips like you’ll need to own or have a long term lease on at least one truck, you’ll need to secure “approved” forms like bills of lading, estimates, and a consumers information pamphlet that are available for purchase from the IMAWA.

You can visit the Illinois Commerce Commission’s website to see all the rules and regulations that apply to Illinois Household Goods Movers at  http://www.icc.illinois.gov/motorcarrier/householdgoods/.  The IMAWA is also always available for help and direction at www.imawa.com.  They can be reached by phone at 217-585-2470.

What Is Biodiesel?

Biodiesel is a cleaner burning fuel produced from domestic and more importantly renewable resources.  Is it vegetable oil?  No.  It is produced when vegetable oil (like from soybeans or restaurant waste oil) is refined in a process called transesterification.  The process produces glycerin and biodiesel, a fuel that is biodegradable is non toxic and free of sulfur.  It must meet the ASTMD6751 industry standard for fuel so it’s safe to use in any diesel engine, whether it’s blended like B20 (20% biodiesel and 80% conventional petroleum diesel) or straight.  A visit to the NATIONAL BIODIESEL BOARD SITE at www.biodiesel.org will give you information on biodiesel news resources, where you can buy biodiesel and much more.

Why Should I Use It?

The EPA reports that even B20 biodiesel can reduce emmisions by 15% vs. conventional petroleum diesel.  Since the raw materials behind it are domestic and renewable it is a sustainable fuel that will lessen our dependence on foreign oil.  The process to refine biodiesel is cleaner than refining conventional petroleum diesel too.  Studies suggest that production of biodiesel can help generate farm income, reduce farm subsidies, add jobs and even cut the trade deficit.  All these things along with excellent lubricity that reduces wear and tear on the engine make biodiesel a fuel to consider.

Are there are Concerns or Drawbacks?

Biodiesel straight does not like severe cold so it should be blended in colder climates.  More information concerning biodiesel in the cold can be obtained by reading at www.biodiesel.org/cold/.  Also, since it has a mild solvent in it biodiesel has a tendency in the early stages of use to loosen deposits in the fuel tank, and fuel systemof a conventional diesel user and potentially clog fuel filters.

Overall, it appears the potential benefits far outweigh potential problems.  More research is being performed every day so it looks like biodiesel could be a viable fuel option for diesel moving trucks and other diesel engines.