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Insurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor

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mike kroesenInsurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor
by on Oct 23, 2012 at 9:19:26 am

I have a series of related questions. I will keep them short.

A1. If you plan to rent equipment, locations, small crew, and talent for projects with budgets under $300,000 is D.I.C.E insurance the best most affordable option?

A2. What is the standard monthly premium range for D.I.C.E?

A3. Does D.I.C.E include general liability?

A4. Does D.I.C.E include L&I?

B.1 Lots of video pros consider themselves to be independent contractors. Many ad agencies and production companies consider the crews to be IC's. Ask the crew person to fill out an IC form and then submit a 1099 and your all set. From what I have read the I.R.S. does not consider grips, camera ops, PA's, and such as IC's and the practice I mentioned above could come back to bite the companies. For example if the grip does not have L&I Insurance there is a strong chance the law will consider that the responsibility of the ad agency and/or production company if he/she were to get hurt on your project. It seems like the best thing to do is to always use a payroll service. If however you are used to paying a grip say $550 for a 10 hour day - going the route of using a payroll service will inflate your crew costs. Any idea by how much? Consider this a non-union project for coming up with costs ranges and or alternative strategies.

Thanks for taking the time to read and reply to my post.

_______________________________________________
MIKE KROESEN | BROADCAST PRODUCER & FCP EDITOR
206.552.3773
mike@mikekroesen.com
http://www.kroesenfilms.com


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Rich RubaschRe: Insurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor
by on Oct 23, 2012 at 3:48:32 pm

Independent contractors need to prove that they are...um...independent. There is a checklist to determine this and each state is a bit different. For example do they work under their SSN or do they have a FEIN? Do they use their own tools or do they use yours? Are they responsible for their profit/loss on each job?

Here is the Wisconsin rules:


The state of Wisconsin uses a strict nine-point test to determine whether a person is considered an independent contractor rather than an employee for purposes of workers' compensation and unemployment compensation coverage. A person must meet and maintain all nine of the following requirements to be exempt from such coverage as an independent contractor (WI Gen. Stat. Sec. 102.07 and WI Gen. Stat. Sec. 108.02):
• Maintain a separate business.
• Obtain a Federal Employer Identification Number (FEIN) from the IRS or have filed business or self-employment income tax returns with the IRS based on work or service in the previous year. (A Social Security number cannot be substituted for an FEIN to meet this requirement.)
• Operate under specific contracts.
• Be responsible for operating expenses under the contracts.
• Be responsible for satisfactory performance of the work under the contracts.
• Be paid per contract, per job, by commission, or by competitive bid.
• Be subject to profit or loss in performing the work under the contracts.
• Have recurring business liabilities and obligations.
• Be in a position to succeed or fail if business expense exceeds income.


Here's a little legal speak:

A covered employer can minimize its liability exposure now by analyzing whether it can meet its burden of establishing independent contractor status under the various legal tests that apply to it. The criteria used to determine whether an individual is an employee or a bona fide independent contractor differ depending upon the law under which the analysis is made. For example, an individual may be considered an independent contractor for tax purposes, but considered an employee for worker’s compensation, unemployment, wage and hour, or other purposes. Generally speaking, it is the employer’s burden to establish the existence of a bona fide independent contractor relationship. The label used by the parties is not determinative.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
http://www.tiltmedia.com


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mike kroesenRe: Insurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor
by on Nov 3, 2012 at 9:14:59 am

Hi Rich! Thank you for your reply. You confirmed the conclusion I had arrived at. An individual may be considered an independent contractor for tax purposes, but considered an employee for worker’s compensation, unemployment, wage and hour, or other purposes.

It seems that if anything were to go wrong on set and a person were hurt that the independent contractor will quickly be considered an employee. An employee that you have likely not dealt with from a legal stand point as an employee.

The bottom line if you want to cross you T's and dot your i"s you should use a payroll service to cover yourself.

Rich, by any chance do you have any advice on what the best insurance a commercial and corporate video production company should purchase? And what a competitive rate would be?

I'm familiar with producing $750,000 30 second broadcast spots with 12 million dollar ad buys but as I stop working for agencies and start to operate my own company likely my budgets will start out at $15,000 to $30,000. I was thinking I need DICE and General Liability.

What are good rates, good vendors, and are there any other policies I should consider?
I shoot digital for web and broadcast distribution.

I look forward to your reply.

Cheers,

Mike Kroesen

_______________________________________________
MIKE KROESEN | BROADCAST PRODUCER & FCP EDITOR
424.274.9454
mike@mikekroesen.com
http://www.mike-k.com







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Rich RubaschRe: Insurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor
by on Nov 13, 2012 at 2:49:48 pm

I suggest you find a reputable agency in your area who covers production companies. Ours here in Madison WI was M3 insurance and originally we went thru the Hartford, but now are with Travelers and they have been great.

I pay about $4500 annually for business and worker's comp. We own our building and have 5 employees.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
http://www.tiltmedia.com


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mike kroesenRe: Insurance, Payroll, L&I, D.I.C.E. and who is and who isn't a independent contractor
by on Nov 13, 2012 at 6:03:57 pm

I have used the Hartford in the past. I will look into Travelers.

Thank you very much for your assistance.

. . . . . . . . . . . . . . . . . . . . . . . . .
Mike K. Kroesen
Director⎜Agency Producer⎜Post Producer⎜Editor
206.552.3773
http://www.kroesenfilms.com


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