I Got Audited and Fined $100,000

[@frederickgreenfield7635]

Probably didn’t help having the Ducktails swimming in money picture on the wall 😂 Happens to the best of us T! Take it on the chin and move on

[@gary_neilson1896]

LMAO!

[@TigranGertz]

🤣🤣

[@MegaMaster04]

You have to feed the goose that lays the golden egg 🥚.🤠

[@beatrizbuford4665]

Thank you for allowing us to see the vulnerable side of being a business owner and learn from your experience. Appreciate your insights!

[@garageworker]

Did you consult a lawyer? 100K is lemme call my lawyer for a second opinion territory.

[@exjw8623]

Actually for a growing new business 18,000 a year avg increase for worker comp ins is not bad at all. It tells me he is making money and he hired more people and they are making more money because of loyalty and good work ethics. To me the people that always whine about paying high taxes dont get it, if I am paying high taxes means I made a shite ton of money. Taxes are no different than paying a toll to use a road. You gotta pay the toll to let that money roll.

[@harryknuckles3667]

You’re a good guy, whatever you loss you’ll get back 10 fold. Trust 💯

[@ricepadi29]

That’s why if you can replace a worker with a machine it is a no brainer. Sounds like their sales agent didn’t do a good job keeping your numbers updated as you grew.

[@MrPhatties]

Absolutely love how transparent Tigran is about everything. I know a few lawyers and consultants that would have had a field day with this one and if nothing else would have cost them at least what they collected.

[@aaronjackson2780]

Love die antwoord!

[@eddieeddie8296]

They always go for the small guys, that’s the real problem

[@TonyMontana-fs3lu]

Lies

[@duck0fdeathc336]

@@TonyMontana-fs3lu new companies get hit the hardest because they don’t have a track record

[@TonyMontana-fs3lu]

Duck0fdeath c not true

[@NotSureJoeBauers]

I'm a free market guy but it's nice that my province has monopoly on workers comp and automotive insurance. It's about 3.5% for gardeners, up to 7% for higher risk occupations. A company I used to work for would split our checks between "gardening" and "construction" to save on the rate

[@rontopping2048]

20 % that's crazy , I would take them to court

[@jennieanddavis]

Thank you for sharing, T. We’ll avoid this mistake thanks to you. Appreciate the shortcut 😉 Your growth mindset and level of personal responsibility are rare!

[@knowbloc]

yo Tigran first off much respect for being transparent enough to share this with us so we can keep a closer eye on our paperwork and learn from you. Seems like you are handling this much better than most. Stay strong homie. Also don’t be afraid of your facial hair my friend ik shaving is professional but you’re clean cut enough to rock it professionally ✊🏽✊🏽

[@TigranGertz]

right on man. will do

[@maxbarajas4590]

Wow, This just happened to me around 5 months ago. Got hit with a $23000.00 Bill from STATE FUND as well. I will look for another insurance company. Scammers!

[@DavidOldenburg1]

Laughing..."maybe they will owe me money, maybe I will owe them money"...from my experience...they never owe you money...if so, they will re run the numbers until you owe them. Welcome to the group!

[@joshjuly7805]

:)

[@davidboreham]

Based on the doc you showed, you weren't _fined_, but rather they assessed premium owed as $95k more than you'd paid. A fine would be like "we want more money than you owe us, because you lied to us or didn't file in time or something". This was just "look, we charge based on the size of your payroll and the kind of work employees do, and here's the correct price based on the actual payroll numbers". Whoever is doing your payroll should have been aware that significantly higher payroll than WC were notified of would incur additional premium.

[@TigranGertz]

100k for 500k in labor is not good. My rate now is 7%. I have made my peace with it. Moving on to the next lol

[@eddiemanrique8316]

He def should've gotten a heads up from the company before it accumulated to that much. They shouldnt assume that people have 100k lyung around

[@davidboreham]

@@TigranGertz Yeah crazy rate, although someone I know who works in HR guessed 17% before I told her your rate, for landscaping workers in CA.

[@davidboreham]

@@eddiemanrique8316 If it's like our workers comp (different state so, who knows..) they send you letters making it clear that the payroll numbers you give them affect the premium and if the estimate is wrong you need to tell them the new number.

[@TheSpatulaCity]

@@TigranGertz Next time hire more Clerical Office Employees to do the labor. lol

[@jesserousseau2481]

I absolutely love watching you!! Just a reg guy like us. Love that makes me feel better about myself

[@CoastConcreteCorp]

In NYC you can’t have a business license without valid workman’s comp and general liability.

[@mslee4441]

We use Gusto in my Landscape business. It's fantastic they only partner with the best providers for insurance etc. We have a payment plan set up to were we only pay what is owed per pay period. Another words we aren't blindsided at the end of the year with a huge bill.

[@actionhiro4222]

Thanks for making this Video. Depending on the category of work. Workman Compensation is usually under 2% in Canada. It's government run . I am glad private insurance companies aren't involved in our system. It's definitely a ripoff in California

[@rafaelmiranda8935]

I used to pay Statefund 22% when I started out. Now adays my rate looking more like 8%. I shopped prices myself. Agents start calling when your due for a renewal. Statefund is the most expensive out there.

[@TigranGertz]

Rafael Miranda now I’m at 7%

[@alen-commentnazi8774]

what do these numbers mean? like what is the 22%?

[@ktakos4529]

What you use now???

[@rafaelmiranda8935]

@@alen-commentnazi8774 An easy way to understand it is that you pay $22 to Statefund Insurance for every $100 you pay an employee..

[@diegocastaneda5102]

That’s the 10X rule for you🤣

[@hsangha01ify]

How they get you is by letting you guess the payroll you have and most company owners are going to always guess Low because they want a low premium and they'll let you do that because they know in the end they're going to come back and get you when they audit you

[@robertgentile6799]

Hey Tigran, you’re making good sense with qualifying your customers first and giving them a heads up on pricing. I’m running same type of business in Montréal and I’m doing that as well...Also around $18-20/Sqft, and some homeowners just don’t get it! So we just keep on pushing forward looking for more reasonable ones...

[@kevincoleman9761]

Welcome to California. You have to earn more to pay. You may want to get a new payroll service. I use one that specializes in construction and provides workmans comp. we get audits every year. And never owe much. I hired a trucker once that didn't have it so I had to pay on him. You have great advice on not working for cheap owners. I supplied stone to a mason in north ridge that had 10 illegals, paid them 10 an hour cash.

[@fame0095]

im going thru the same audit as well, cant be any worst than IRS audits, ive been thru a handful of those. oh well, will see how it goes

[@edwardrutherford5855]

Dont worry T. Your a winner. I could tell the first time I saw you on your channel. Just brush it off, and keep it moving my guy! You da man!

[@kevinbaird7277]

As I watched this I was munching down on an apple, I had to put it down, then lie down, I feel your pain, I went through something similar and this brought it all back, I am still shaking.

[@atrocitiesuponcities7443]

Amigoo!! Thanks I'm going to start filling up the mattress for this one.

[@kickandblock]

You need to find an agent with a solid company, not a broker. The agent will tell you upfront what could happen come audit time, and he can better prepare you for that. If payroll is a bit higher 1 month than initially reported, he should adjust your policy accordingly. I work for a reputable insurance company and we take care of our commercial clients and make sure this does not happen. We have companies with million dollar payroll in our book and we have never had issues.

[@toddcorsello3490]

You need a better accountant and always have the accountant handle the audits. This is standard business practices. Next get your worker’s comp through your payroll company and have payments come right out with payroll so there’s no more estimating or surprises

[@Twee877]

Facts. In that case the mistake is usually on their end. If you use pay by pay thru adt. They usually send me a check back after an audit.

[@zotex681]

ive never had 1k im my life, i cant imagine loosing 100k. rip

[@jvicente8315]

yup

[@Overfl00d]

You didn't get covid money huh, sucks for you

[@woh4664]

get those numbers up, those are rookie numbers!

[@caleboldhouser478]

You have to work harder then.

[@abelrico3324]

Get ya paper up

[@me005003]

I always wondered how those advertises work that says they can settle tax debt for penny's on the dollar, saying like this guy owed $30,000 & settled for like $4,000.

[@clementslawnlandscapellc8871]

Straight up!!!! I love hearing the I gotta guy that can do it cheaper. I just say awesome you may want to stick with him then. If things don’t work out you can give me a call but I’m not your guy then.

[@devilmonkey]

It's an obvious negotiation tactic people use, same as how he tried negotiating his workmen's comp payment. Funny thing is though he went with the cheapest payroll company to save money sounds like 😂 everyone in life is just looking to save money

[@austin3790]

Bro, I am trippin now lol

[@DS-TRUCKS]

I pay mine every week... Keeps it from getting too high.

[@ramstafar]

Can you buy workers comp weekly

[@DS-TRUCKS]

@@ramstafar yes. I do.

[@jeremyvai8326]

Screw state fund, get private work comp.

[@payloadperformance9706]

Oh sweet you’re local to me, I live in Santa Cruz but always working in the Bay Area, I’ll make sure to say hello if I see you around.

[@getgoodson8298]

dd you get a beard transplant?? that shit looks too perfect

[@adventuresinlawncare3734]

It all clicked for me around 8:30 mark. I remembered reporting my projected payroll when I purchased my WC policy.

[@suburbanhobbyist2752]

A couple things 1) It is MANDATORY to carry workers comp insurance in California. It isn't a choice. Anyone who doesn't have it is operating illegally. 2) I feel your pain. It is easy to estimate your payroll but then get busy, do a ton more hours and forget that your estimate was low and not save for it 3) You should get a massive credit line so you don't have to keep money sitting around un-invested but still have the ability to pay for things that come up because, I agree, something always comes up. 4) You really need to look into "Captive Insurance". Captive Insurance is where you get together with a group of other people with like kind businesses and you all start your own insurance company. They are managed by captive management companies so none of you need any experience. If you contact an insurance brokerage who provides business insurance they will hook you up with a group. You basically own the insurance company so you pay your worker comp rate (and other insurance types) into your new insurance company and it cost about the same as you pay now, HOWEVER, if you are safe and have no issues, you get a lot of that money back after that year closes out. Basically, you get the profits that the insurance company was going to keep. Captives do not even accept unsafe companies so they will check to make sure you are a good operator first. It works great (I was a member of one for years) and is 100% legal. You do have to go offshore to 2 meetings a year. My captive had one in the Caribbean and one in Canada every year but I swear it's legal. 5) I'm available for consulting! lol.

[@coachiti2009]

That same thing happened to me, but not that much. DON'T USE MARKEL for Worker's Comp. Long story short, they signed me up for worker's comp, we did various items, concrete, landscaping, and masonry. They applied those three risk factors, quote and contract was $2,400 for 34k in payroll for worker's comp. During audit, they applied the biggest risk factor to all payroll and wanted $4k plus for one person for worker's comp. I fought the audit, showed contract with various risks, and they said their auditor believed that they were only able to apply highest risk per their policy. Again, never us Markel for worker's comp!!!!!

[@mike93lx]

That isn't a fine, it is a workers comp bill. Have you not been paying monthly premiums?

[@siliconvalleylife2.048]

Michael Rodgers, Workmans compensation only requires a deposit when the premium starts. At the end of the year, renewal time, they audit your payroll and send you the actual bill. In Tigrens case, a boatload of money. Workmans compensation rates vary by insurance company's, it could be as low as 10% of payroll, or as high as 45% of payroll depending on your classification. For instance, working under 10ft high reduces the rate hugely, working on ladders above 10ft increases the rate a lot. Doing concrete work is 45%, whereas doing pavers in less than half that. Either way, other than the initial $2,000 insurance deposit, the bulk of your bill is billed during the audit at the end of the business year. The fact that Tigren had State Fund as his insurance company means he did pay his bill. Company's pay monthly because they can't afford to pay the deposit in one check. But, paying monthly increase your bill, your paying a much higher monthly bill than you otherwise would at the end of the year. State Fund is the worst and most expensive. Get off State Fund.

[@user-kn1rg2br4h]

@@siliconvalleylife2.048 Dam bro who told you to do a whole essay?

[@siliconvalleylife2.048]

@@user-kn1rg2br4h I wish someone gave me an essay when I started out. I had to learn the hard way.

[@jameszukowski6708]

@@siliconvalleylife2.048 great explanation! I always joke around that I try to take home atleast as much as I pay workerscomp.

[@siliconvalleylife2.048]

@@jameszukowski6708 Workmans comp insurance is legalized extortion. The big companies don't have to buy insurance as long as they have a couple hundred thousand in their business account, yet when their workers get injured, their comp is paid through the EDD which comes out of our collective payments. Us little guys are extorted to cover the costs of the big guys injured.

[@sadietp2362]

I have state fund for my business too. That's your premium bro. Not a fine. My x mod is 1.82 lol. You got lucky with 1.28. My payroll is about the same as you and I pay $4.2k a month.

[@YakMotley]

Great video!

[@nigj]

Get a lawyer and fight that.

[@lucasdurham6830]

Scary ordeal, now you know you can power through anything💪

[@logdon17]

This is the same thing as if me and my wife took zero deductions from our paychecks all year and at tax time they wanted $95K (about what we handover to Uncle Sam every year). We just pay the amount each paycheck and have zero surprises, cost of living in this country.

[@nathanc3189]

Worker’s compensation in Australia is roughly 1.7%

[@TigranGertz]

wow. Now im paying 7%

[@Masko1992]

95k..fuuuck I felt those butterflies from over here

[@thelawnmowermancompany7694]

Man that was a ton of money I am glad that you had the cash pay them. Glad things worked out for you wish you well God Bless

[@LAKESIDEBOB1]

Not many small business people understand insurance. For workmen's compensation insurance the insurance rates are set by the state. As you communicated you gave the insurance company an estimate of your yearly wages and the policy was based on that wage amount. The actual wages paid that year was far higher. The audited numbers are used to adjust the premium based on actual wages paid. That is how you arrived at your $95,000 insurance bill for the audit. If you included workmen's compensation cost in your overall labor cost per hour (the 16% the insurance company charges for that type of work) worked then you collected the $95,000 in your billings for the work performed, you just did not recognize that cost on your profit and loss statement, now you are including it so your profit went down $95,000.

[@albertoceledon5530]

Got to pay to play with the big boys, the big leagues can get expensive sometimes 😎 no big deal you got this bruh 👍

[@dbzgef]

I don't know where to start ? I got tools and getting there on my landscaping quality but how do I even start getting my own company or whatever it is that I need.

[@leroy2020]

Damn Son! More $ More ProblemS!

[@christoffjones8422]

With 5 years in business, you should have been left State fund

[@acunchevy54]

I got hit with 30k. Years ago had to pay them suckers. I am broke now. Business collapsed.

[@siliconvalleylife2.048]

Workmans compensation insurance is legalized extortion by the state.

[@alancaguilar89]

Damm bro! Keep your head up!

[@itzOLE3]

Great video! Straight goods

[@emersonthomas5769]

What would have happened if he just didn’t pay it and went with a different Company?

[@playgroundofsound7683]

Thanks man good stuff

[@grandazzo6634]

Yes Sir 👍👊

[@ddn488]

Lesson learned with California business. Move out from California to Florida. With your talent, you make a ton of money in Florida without paying non-sense money to the California government where there are many crazy laws and bureaucracy

[@tonyneglia6648]

I don’t understand a few things: 1) Why is your experience mod (percentage) so high, u need to shop around 2) If your audited payroll is minimally different from your reported payroll , and u have been making your payments, why does it appear that you owe your entire premium Oh well, at the end of the year it’s just another write off. It just sucks that you had to give it to those bastards, and couldn’t use it for equipment. Keep fighting the good fight!

[@Dad9700]

Thanks for sharing that information bud

[@TigranGertz]

no problem

[@ernestmartinelli9604]

Liquid availability is very important, I agree

[@TigranGertz]

We love agreeing

[@bobojr456]

My workman's comp last year was something like 1.x%. I couldn't believe what I saw on your paper. Insanity! (I'm not from the US)

[@TigranGertz]

wow.!! cheap

[@hbk567]

Taking L's is never a lose only Lessons

[@pozin05]

20% in 100k in payroll? Seems high , must be able to get for less. Also you don’t have to cover yourself, just employees in my state. You can opt out owners.

[@eddiemanrique8316]

Tough lesson there bro! Sorry.it had such a price tag

[@ellyrivera4793]

It appears that you were not on a pay-as-you-go plan. Instead, you were given a fixed premium amount, and when you hired new employees, you failed to report them. With pay-as-you-go, you report the payroll amount for each class code every month and pay the adjusted amount for that period.

[@tiptoplandsolutions1421]

Been there....I've been with State fund for years......I watch my estimates like a hawk....I felt they would give me a surprise i did want or expect...so, I over estimate....At first few years I'd get money back....But when I got more busy I didn't estimate as well and would have to pay...To me even a extra 5-10k to pay when not expected,SUCKS...... So, back to the estimation game agian...feels like WWE ' are you ready! To ruuuuuumblllle"....One of the unjoys ✌🤙🤠

[@jesserousseau2481]

In in my first year. Next year I'm getting worksmens comp and all that. It scares me becouse I am horrible with my money. I need help but my prices need to go up an that is going kill me becouse right now I'm the cheap guy that dose the best work I town. I will lose customers but I need to charge 200 an hr vs 50 to 75

[@steveoreneo8220]

State Fund is a crooked organization. They would send me the quarterly self audit forms, I would fill them out and fill in the appropriate category (Base carpenter, framing carpenter...). Then at the end of the year they would say I owed them $30k extra and send me their forms checked off with categories that weren't even on the original forms they sent my. My accountant and insurance broker both said they were wrong.

[@hollaatamigo8304]

Great advice! Thanks T!

[@kills456]

My workmans comp company doesnt do in person lol they just send dry ass emails and phone calls

[@siliconvalleylife2.048]

You need to dump State Fund, and hire an independent workmans compensation insurance company. State Fund is for brand new lincensees, or company's that get in trouble by letting their workmans compensation insurance lapse, in which case the contractors license is suspended and the state requires the company to get State Fund. Your big, your a phenomenal unicorn, you need a workmans compensation insurance company that works for you, not against you like state fund. I'm not recommending any, you gotta shop around. Call a broker. Don't lapse, hire one, get them in place first. Then dump state fund. Don't ever let it lapse, it's just a mountain of trouble.

[@iilijah]

Here is better advise. State fund is your first company for workers comp as a new company. But after your second year you drop them and get another carrier.

[@caleboldhouser478]

I just got audited the other week. My payroll is small compared to yours though. So far this year I’m only at 100k.

[@peppylapeeeU]

You have to audit your payroll every year, especially if there are changes in the number of employees or changes in how much they're paid. If you hire more people, then your payroll increases, which is common sense and it means the WC INS premium needs to be adjusted. It's better to pay a little higher premium and get back a refund check rather than find out you underestimated payroll. Glad you have it and if you're getting underbid by large amounts then find out who they are and call OSHA, DOL, IRS etc so they can be audited. We have to many sorry employers who don't give a dam about misclassification or failure to carry wc.ins and they constantly beat everybody out on jobs because of this and it needs to stop!!!

[@m_lopez8272]

Give me his number!!!! HAHHAA

[@alanjswanner844]

Don't know if it's the same in all states but in Louisiana, NEVER include yourself under workman's comp if you are the business owner. It's truly unaffordable!

[@weatherphobia]

I hate small business people, and I am GLAD you got fined, and it made you pay fines. I AM NOT JOKING! 😆😅🤣

[@TigranGertz]

jeez, that was harsh haha

[@Scottieb1031]

At least they hooked you up with that discount 😂

[@dammitsylvester366]

Liked the video to help u out😘

[@boobyhatch7897]

The Crock, of workman’s Comp

[@frankgrant4784]

Be sure to watch your Ex Mod rate Mr T, it can affect your total premium as well. If possible look into joining the local branch of CLCA that may help your rate. Its important that you understand that you also pay work comp on vacation pay and overtime pay. If you can when an employee does get injured try and bring them back doing less physical work until them get mended. Have a safety program at work as well. Make sure that your work classifications are accurate, so that you do not over pay or under pay premiums. Keep doing residential work only, stay away from unionized commericial or public works projects, your employees will develop some nasty work habits. Welcome to the California tax, lol

[@TigranGertz]

welcome to cali lol

[@slippy11ful]

The company that moved his tree for him hire union operators. Those were union guys moving that tree. I didn't see any laziness? That stereotypical, unions are lazy, just isn't true.

[@frankgrant4784]

@@slippy11ful What in the world are you talking about Slippy?

[@slippy11ful]

@@frankgrant4784 in another video he had a tree moved for him. They were union operators that rigged it up. And in another video, union high voltage electricians reran a bunch of underground high voltage wire for him. Nothing wrong with union labor. Cali taxes are different. They're stupidly high

[@richardmagpantay3252]

My father in law owns a construction business in the Bay Area and he got hit with the same thing last year.

[@genecoppedge5972]

Sounds like you need an attorney in your back pocket just for an occasion like this. Thanks brother for your transparency and making us aware. My radiator repair guy, in Southern Arizona, for automotive and heavy equipment said he pays all his taxes, EPA compliant, OSHA, compliant follows all the city, county and state regulations. But the guy around the corner or down the street doesn’t do any of that but the city refuses to shut him down and make him pay up or shut down because of politics and may appear racist.

[@jesuslovesyou8280]

It’s based on what you make. I give my guys 1099 in Maryland. I’ve been installing Floors for 24 years. Save your money Tirgan

[@TigranGertz]

yeah but if they dont pay 1099 becomes a problem later on

[@Johnny-300]

So your saying your employees are independent contractors who are left unsupervised at jobs ???

[@tntcichlids8015]

I know a few guys who tlkd bout u while back n said your shady as it gets lol

[@vegaclimbike]

hey do you have videos or images of your completed projects? i like your vid. thx for informing some of us...

[@samverstocken]

Instagram: applewoodlandscaping

[@brianN9955]

Good stuff man

[@gregchapman6190]

Yeah they hooked u up allright

[@alfredohenriquez5636]

I also use state fund but pay as I go because it can add up it happens most of time we get a small refund at the end of the year

[@elgringodetexas]

Texas ... Workers Comp is not required

[@thewhiteknight02]

You underreported in the past then. Or get a better payroll that takes a more accurate rate out for WC.

[@rolandocedilloespino2308]

JUST BOUGHT MY FIRST PROGRAM !!!!!

[@exjw8623]

The answer is to self audit end of every year so you can up your coverage end of year instead of at the five year mark

[@nunyabidness1339]

A certain portion of your time is administrative, make sure they're not figuring you at a construction worker rate 100% of the time, etc., etc. Also, did you work on any projects where there was an OCIP policy in place. OCIP stands for owners controlled insurance policy. Sometimes project owners will provide insurance to cover themselves and therefore the contactor does not need to provide insurance. If so, then you wouldn't need to pay your companies insurance premium/deduction because you were covered by a different policy. Finally, try talking to someone other than the auditor and/or pull your your business from that payroll/insurance company.

[@TigranGertz]

now my rate is 7%. good info tho. Thanks

[@jameswhinery4456]

First problem was having state fund. Shop your workers comp around way different price factors.

[@TigranGertz]

Oh well, it happens

[@jameswhinery4456]

@@TigranGertz been there done that to

[@ofrimashiah2]

The problem is that something was wrong with your books? Or that you had employees with no license for that?