Cohousing-L Mailing List: RE: liability for employees (longish)

[Sue Pniewski (SPniewski]

You are right Lynn- this is a sticky situation.
I suspect in most situations, it's better to be more
careful than less careful.
My firm does premise liability inspections for hotels and 
resorts regularly.  You'd be amazed at what we find.
And these are the properties that have the DEEP pockets.
So I think you can't be too careful.
You might want to think about getting a premise liability
inspection done.  There are several firms that 
specialize in this.  Really, it's kind an insurance.
It could let those of you worried about this premise liability
feel better.  
Oftentimes the inspector will leave you with a packet of information on
employees, and invitees, as well as for residents, and often
they are willing to give a presentation.
I remember on resort we did, we gave a presentation on
how to minimize liability for an outside bar,
they had drunk people tottering around their pool, jacuzzi, and
their beach.  They habitually poured alcohol down the necks of 
guests until some were far past the capacity to care for themselves.
Then someone fell and knocked out a tooth.  They thought
they were just helping them have fun and that
adults were responsible for taking care of themselves.
Wrong...
It's not too expensive to get a report done,
perhaps $1200-$1600 plus airfare, some charge a per diem, 
but if you house them it would be less.  You may be 
able to negotiate it down because you are a non profit.
You may also be able to negotiate a payment plan.
If that is too expensive, you should do some research
to be prepared, and set up an action plan in case of emergency.
All these things we have been discussing are just steps
towards limiting your liability, unfortunately,
in today's society, you're never 100% safe.
Best of Luck!

-------------------------------------
Susan Pniewski, Esq.
sue [at] firstcoastlaw.org

-----Original Message-----
From: Lynn Nadeau [mailto:welcome [at] olympus.net]
Sent: Thursday, September 18, 2003 4:52 PM
To: cohousing L
Subject: [C-L]_liability for employees (longish)

The discussion on this list (Sue-Dave-et al) about who is an "employee" 
and who is an independent contractor is a very important one, in general. 
RoseWind went through a lot of learning about labor laws when we had the 
situation of the carpenter who fell off his ladder and broke his hip. Any 
of you who hire members or off-the-books labor for anything should get 
really clear about all that could entail, according your your state's 
laws.  

In our case, the focus was L&I, Labor and Industry, workman's comp. If a 
worker is to be covered on the job, they need to pay into L&I, either via 
their employer, who takes it as a paycheck deduction, or by paying it as 
L&I insurance on themselves. In constructing our common house, we did a 
lot of volunteer work, and we paid L&I for our volunteers, keeping the 
necessary paperwork as to how many hours of what jobs had been done. It 
was a small sum, but protected us in the event of a construction-site 
injury. Our non-volunteer workers were hired through a local carpenter 
co-op which did the paperwork dealing with their Social Security, L&I, 
and such, taking it out of their pay as an umbrella organization. 
Licensed individual contractors also pay their own Social Security and 
L&I (so, for example, when you hire an official plumber or electrician, 
they have that coverage on themselves). 

If you have an independent contractor, in the State of Washington, you 
are not the one who has to keep track of, and pay, those payroll 
deductions. Our injured guy was a construction carpenter who, it turned 
out, didn't even have basic medical insurance on himself, much less L&I. 
We had naively assumed, in hiring him "cash" that he would either have 
provided himself with insurance, or would accept the bum luck if he had 
an accident and was uninsured. (Our first reaction was to take up a 
collection to help him out, and bring him soup and flowers.) 

But instead, he got greedy and filed an L&I claim, as if he assumed we 
were paying L&I for him (which he absolutely knew we were not). He then 
disputed our counter claim that he was functioning as an independent 
contractor. That led us through the whole legal maze of whether he 
brought his own tools and equipment to the job, directed helpers, decided 
his own schedule, etc (all of which he did). But it took all sorts of 
bureaucracy and costly legal piloting to get this through the heads of 
the pretty-thick L&I folks. Even then, this had now come under the noses 
of the IRS and they wanted back-money and penalties, and wanted to know 
who ELSE we had paid for work, outside official contractors. This 
resulted in the discussion of several members whom we had paid for work 
such as tile-setting and carpentry. I forget the exact outcome of that, 
but we got partially off the hook because they were members, but not 
entirely. We now are super cautious about getting only proven-coverage 
contractors to do any paid work. 

Our babysitter dilemma, however, is not the same thing. We could pay L&I 
on sitters, and that might be the way to go. Although thus acknowledging 
that we were employing them would trigger some sort of paperwork, whether 
ours, or some arrangement like Sue was talking about, I assume, whereby 
they take responsibility for the income reporting, themselves. 

Unless we actually have L&I coverage on a sitter, and are otherwise 
handling it as employer-employee, we would still be in a dangerous 
liability situation -- Sue refers to it as "premise liability", so that 
must be the technical term. Our regular liability insurance covers 
visitors, but not employees. 

Current discussion here is leaning towards calling sitter money a 
donation, and collecting once a year at budget time. Some worry that this 
would still leave problems, others believe that if it is by donation, it 
is not an Association expense and the HOA is in that case not an 
"employer". Still, if the sitter claimed liability, what would the 
insurance company say  if  the sitter were employed not by the HOA, but 
by donations by the HOA membership? 

Why is this so complicated? I don't want to be ruled by fear, but with 
multiple members, you have to respect those who have the strongest 
concerns in matters such as these, as we would all be liable if we got 
sued. 

Lynn Nadeau, RoseWind Cohousing
Port Townsend Washington (Victorian seaport, music, art, nature)
http://www.rosewind.org
http://www.ptguide.com
http://www.ptforpeace.info (very active peace movement here- see our 
photo)

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