Special to the Carolinas AAA Auto Club Newsletter - by Anthony Cannella

"My Workers' Comp premiums are going to do WHAT???"

Better "Buckle-up", South Carolina. It's going to be a rough ride. In case you haven't received your renewal notice for your Workers' Compensation Insurance yet, you are in for a shock. As of January 1^st 2007 , South Carolina Workers' Comp premiums increased an average of 18.40% in ALL job categories across the board. What that means is guaranteed increases in labor costs for an automotive industry already hurt by rising fuel prices. Even if you have a good "clean" Workers' Comp claims record and an "Experience Modification Factor" at or near 1.0, the news is not good. Towing companies will be hit the hardest; On every $100.00 of gross payroll reported for your Drivers (Workers' Comp code 7228) in 2007, you will be charged about $12.66 to cover them with Workers' Comp. Last year, this same coverage only cost Towing companies an average of $10.55 per $100.00 of gross payroll. Auto Repair Shops and Light Service personnel (W/C code 8380) rates jump from last year's average rate of $4.73 per $100 up to @ $5.68 per $100 for 2007. Auto Body Shops (W/C code 8393) are looking at a 2007 average rate of $4.00 per $100, compared to last year's rate of only $3.32. If you multiply these differences by the total gross payroll reported for the employees in your company, the resulting figure (Your new Annual Premium cost) is scary, and scarier still, be prepared to pay up to 33% of that Annual Premium cost up front! If you have been unlucky enough to have had a couple of Workers Comp claims resulting in an elevated "Experience Modification Factor" above 1.0, the additional cost burden of that unhappy circumstance could force you to consider one of two undesirable alternatives:

1)Shut down your company due to your inability to afford Workers' Comp coverage, or,

2)Try to operate WITHOUT coverage at all

On the surface, Option #1 would seem to be the worst possible alternative since, after all, what could worse than being out of business? Surprisingly, the answer to that question could very well be Option #2. Keep in mind that choosing Option #2 would not only put you in direct violation of State law (All companies having 3 or more employees are REQUIRED to carry Workers’ Comp) and therefore subject to forcible shut-down anyway, but you may also now be facing punitive action that could include harsh fines and even jail time. Believe it or not, that’s not even the worst part! If it so happens that one of your employees gets injured during the time you are operating without coverage, in addition to the above, you are now PERSONALLY liable for everything that Workers' Comp would have provided for that employee. What that means is that anything of value owned by you outside of your Corporate veil or business (House, car, boat, etc.) can and will be seized by the courts in order to cover the cost of your employee’s entitlements. Those entitlements include but are not limited to:

Clearly, when everything is taken into consideration, neither Option #1 nor Option #2 solves anything.

Fortunately, "Option #3" does exist. There IS a way to properly cover your employees with the Workers' Comp coverage both you and they need, in a manner that often times will actually reduce your current labor costs. As an added bonus, this program eliminates crippling Workers' Comp down payments while assuming many of the undesirable liabilities associated with having employees. Just imagine being able to focus solely on running your company without ever having to worry about Payroll Administration, Workers' Comp and State Unemployment Claims or any employee Human Resource issues, for less money than you are spending right now. Sound too good to be true? The reality is that all this (and more) can be done for you and your company simply by exploring Employee Leasing as an alternative to what you are doing now. As a partner company to AAA, Employee Leasing Marketplace, Inc. has been the exclusive provider and consultant for Employee Leasing services for AAA Contractors in numerous states for over 5 years. In that time, we have saved Contractors hundreds of thousands of dollars each year, which has enabled many of them to remain in business when they might have otherwise been forced to close their doors. As part of an on-going educational and added benefit partnership with AAA, we conduct seminars and perform "Ride-alongs" with the AAA Field Managers in order to meet as many of their contractors as we can to make them aware of all the Employee Leasing options available to them. All of these visits and training seminars are conducted on a "no-cost", "no-obligation" basis. If you are interested in more information or would like us to contact you directly, you may either speak to your AAA representative, call us at (866) 392-5501 or visit us at www.empleasemarketplace.com.

*NOTE * Workers' Comp rates shown in this article are based on industry averages and estimates for 2007. A company's actual Workers' Comp costs are determined by the State, Workers’ Comp Carrier and actual loss history of that particular company.