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Liability For Day-laborers

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Liability For Day-laborers

Postby Craig » Wed Aug 13, 2014 5:40 pm

My name is Curtis.  I own an L.L.C. called “Contract Employment Services” that I run out of my home.  As the name suggests, I provide customers with services performed by my employees on a contract basis.  For example, I may provide a customer with house painting services.  I send my employees to the customer's location to provide those services under my company's name.  My company bills the customer directly for those services and then I pay my employees on an hourly(or sometimes per-job) basis.

A customer has hired my company to provide landscaping services.  My employee is providing those services to the customer to the customer's satisfaction.  My employee tells me he has to routinely hire assistance in the form of equipment and day-laborers to meet the customer's requirements.  My employee provides me with receipts for these.  Sometimes if the amount is small and the need is urgent, my employee will pay for these expenses out of his own pocket and I reimburse him with an expense check in his name when I give him his paycheck. At other times, the expenses are large and the need is not urgent so I pay the equipment and day-labor charges directly.

My question is about the labor that my employee obtains as-needed.  Do I or my company have any liability regarding these laborers?  

1.  If my employee obtains the services of a day-laborer as an expense(not as an employee) and the day-laborer is considered an undocumented alien, what liability would I have?

2.If a day-laborer my employee has hired is injured while working, what liability would I have?

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Joined: Tue Dec 31, 2013 11:40 pm

Liability For Day-laborers

Postby Birlie » Tue Aug 19, 2014 7:58 am

You should contact a lawyer in your jurisdiction to find out the answers to these questions.  In California you would be liable for whatever was done by these people and you can also get business liability insurance for that.  You should also have a personal umbrella liability policy for yourself in case someone pierces the LLC and takes a run at you personally.

In California if you are an "uninsured employer" for workers compensation insurance purposes, you even as a corporate stockholder or LLC limited liability member, have unlimited personal liability if there is an injured employee and no coverage.  Plus the employee can come after you for negligence, unlike with a workers comp insured employer, and just like unpaid child support, the uninsured employer's fund's judgment against you and the LLC would NOT be subject to the normal protection of a California homestead of the equity in your home, and you as a corp shareholder or LLC member would have personal liability for such a debt---not otherwise--but this is a brutal statute in California.

Your concept is sound; but you do have major exposure here which can also be insured against in my view.

Good luck!  Hope that helps.

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Joined: Wed Jan 22, 2014 12:57 am

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