Pool Fill Was Bargain But Also Quite Risky
Regarding Mona Field’s April 4 “Speaking Out” article (“When Not in the Swim, Fill Up Your Pool”) her savings may be ample reward for all of her efforts. However, they may not be, in relation to the risk she assumed.
By hiring “day laborers” she became an “employer,” like the contractors she insinuates were too expensive. The difference is legitimate contractors verify that their employees are legal to work in the United States via completion of Form I-9. Field does not mention if she completed Form I-9 for her employees. Employers found guilty of hiring illegal aliens on a first offense can be fined from $250 to $2,000 per individual.
As an employer, Field is responsible for the collection, payment and reporting of payroll taxes (FICA, SUI, FUTA, SDI). Again, Field, if she did not remit or report the wages and the appropriate taxes is subject to various penalties in addition to the various payroll tax liabilities. To enforce payment of payroll taxes the IRS will seize assets, including one’s home.
As an employer, Field, by law must provide Workers’ Compensation Insurance. Her summary of costs noted in the article did not include this expense. For the type of labor referred to by Field, the going rate at a 100% modification rate is $16 per hundred in payroll. The penalty to a contractor for not providing Workers’ Compensation Insurance is $1,000 per day per employee and possible suspension of his or her license.
Field, as an employer, is also responsible for providing a safe workplace (SB 198). Were steel-toed boots and hearing protection provided to the employees that compacted and jackhammered? Were back-support belts provided to employees lifting and shoveling? Were they instructed on safe workplace procedure?
Employers in California, through CAL-OSHA, face stiff penalties and fines for not providing a safe workplace.
What if an employee had been seriously hurt? Field’s insurance agency and possibly her attorney may have to answer the ramifications of this question. (Under SB 198 criminal prosecution is even a possibility.)
The bottom line is that yes, Field saved 50% ($3,500) from her lowest bid, but was it really worth it? Take her $3,500 and the risks she assumed plus the hard costs noted above that the article does not mention were paid and the costs the contractor incurs to report and comply with the various agencies, to pay insurance costs, bonding costs for the license, contractors license fees, city business license taxes, fuel, vehicle and equipment costs and it seems to me the contractor who bid $7,000 was a bargain.
WILLIAM L. WARBURTONN, Camarillo. The writer is a certified public accountant and the chief financial officer for a landscape contractor with over 400 employees.
