One Barn’s Worker’s Compensation Nightmare

Equestrian Professional April 2016 –

Dear Horse Business Owners,
We wanted to let you know about a Worker’s Compensation issue we have been following with a colleague. Because of what this barn owner has already been through we are keeping the name and location private. That said, if you run a horse business in the USA, we think it is an important read.

Sincerely,

          The Equestrian Professional Team

 

Here is the gist of what is going on at her stable.

To Whom It May Concern:
We’ve been in business for over 20 years.  In that time, we’ve had one claim that required a visit to the hospital by one of our workers, but didn’t require a hospital stay.  One claim in 20 years….one.  Two years ago, we were required, by our carrier, to have an outside auditor come out and review our books.  No big deal.  Our payroll is run through Intuit Payroll Service and all the books are in great shape.  Then, last year, we were required to have another audit.  And this year, again, we were required to have an outside auditor look at our records.  Nothing had changed, so I wasn’t worried.  I should have been.

This year, for the first time, the auditor required our company to show him all our 1099 tax forms that we had provided to our vendors.  If you aren’t familiar, the 1099 tax form is what is given to any vendor/private contractor that performs a service to you for $600 in a year (think braiders, drivers, farriers, accountants, lawyers, etc.).  Not products, like hay, but services. 

I had to provide the information because I must show all bookkeeping records asked for by the auditor.  I wasn’t sure why he wanted to see the records, but he pointed out the following paragraph in the policy that allowed him to look at the records.

Here is what the policy states:

The premium basis includes payroll and all other remuneration paid or payable during the policy period for the services of: All your officers and employees engaged in work covered by this policy; and

All other persons engaged in work that could make us liable under Part One (Workers Compensation Insurance) of this policy.  If you do not have payroll records for these persons, the contract price for their services and materials may be used as the premium basis. 

So the first sentence is understandable.  You are covering your workers for possible injury. Read More

Be sure to check out the Equestrian Professional website!

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June 26, 2016

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