increased WC liability?

Soho · February 2002

I work for a privately held company -- a small manufacturing firm with under 100 employees. The CEO of the company often asks people to help him with personal errands. He asks the receptionist to make appointments for him; he has asked a planner to research eBay for best prices on a personal vehicle. He has recently asked two facilities employees if they would help him with projects around his house. He has asked them to help pour concrete and other maintenance type of jobs. These employees have agreed to help and have done this work during their regular scheduled shift. I find these requests to be a distraction in the workplace. I have had people comment that they feel they cannot say no to the CEO. We have a do whatever it takes culture and people are encouraged to put in effort that is above and beyond. I am uncomfortable with this situation and the fact that the company might be exposed to extra risk for Workers Comp claims and perhaps other types of liability. I realize that this company belongs to the CEO and supposedly he can run it the way he sees fit, however I feel I need to let him know of the risks of this type of behavior, if there are any. Am I overreacting?

Margaret Morford · February 2002

Your concerns are valid. However, I think discussing this with the CEO is a CLE (Career Limiting Event.) He owns the company. If someone gets hurt while doing a personal errand for him, turn it into WC and let them deal with the claim. If it's denied, then the CEO will have to foot the bill either via the company or out of his own pocket. Just make sure that people perform these duties on company time so they are paid for the work. I'd leave the situation alone if I were you.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

OhioSmallEmployer · February 2002

I agree that it's a touchy situation. What you might want to do is look into your states laws and find out what employers are required to have WC coverage. I know in my state not all employers have to have it. Example, if you hire someone to clean your house once every other week doesn't mean you have to have WC coverage for him/her. It depends on how much they make in a period of time. The liability is there. If he is considered a non-complying employer under your state laws, I'm sure he'd like to know that. In Ohio, they make the non-complying employer pay dollar for dollar of the claim costs PLUS premiums and penalties for the periods they should have been complying. On top of that they are excluded from programs that can generate discounts for them.
If he has people work for him on a regular basis, he may want to get his own policy. I've heard of that. If he'd rather put them on the company's policy then he should make sure to report the payroll correctly because if one of them does get injured and WC sees how the injury occurred while doing something that wasn't in the normal scope of the company's operations, he may be audited.
He may appreciate the information you find out. You are looking out for his best interests as well.

WT · February 2002

Usually work done of and in the course of job duties is held to covered by compensation if an accident occurs. This could even happen at a company sponsored picnic during athletic events (even though nobody is being paid) particularly if employees are encouraged to attend and if the company derives a benefit (employee good will). Does the CEO own the company or just run the company. Work being done at his home is misuse of company funds if he is not the owner. Be aware that you are on dangerous ground here. The rich and/or powerful do not relish being told that they cannot break the rules or otherwise do whatever they please.

increased WC liability?

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