We recently completed our Worker’s Compensation audit. This is a yearly pain-in-the-neck, but we do take pride in providing WC for all our employees. Moving is labor intensive, and there are risks, so it’s important to have insurance for potential injuries, claims, and losses. The underwriting process requires a lot of detailed work to review paystubs, receipts, and more, and many things can be learned from going through it.
Having just completed this process, I predict that the cost of licensed moving services will continue to increase by significant amounts, likely at rates greater than inflation. This conclusion is drawn from many factors:
- The cost of gas, which is one of the major costs of the transportation industry, is now high. This alone causes an increase in the pricing a company can afford to offer.
- Because gas is high, and gas is also one of the staples of our employees’ personal expenses, labor will demand higher wages. For transportation businesses, labor and gas constitute most of the cost of goods sold, so to cover the increase in these two critical inputs, moving companies will be forced to raise their prices. This goes for any trucking/transportation business, which means further that the cost of all supply chain delivered items will increase.
- In California, if a subcontractor does not have WC, California law requires that the contractor must pay the premium based on any payments made to the subcontractor. This, of course, does not make any sense, since payments to contractors do not simply pay for the subcontractors’ wages. Payments to subcontractors are for the subcontractors’ prices, which includes their COGS, Expenses, and margin. This incredibly punitive policy makes it difficult for licensed movers to compete on a price basis with unlicensed movers.
As a consumer, I have often wondered whether the premium for using licensed vendors was worth it. Like many situations, the answer is “it depends”. With 10 years in CA my firm belief is that it is worth it. If anyone gets hurt on a job, they will sue everyone in sight, including the customer. This is not a risk you want just for moving across or out of town. It’s much safer to go with a licensed mover that has WC so you know you are protected from any claims.
Okay…it’s 12:07 and all I’ve done today is get my teeth cleaned and rambled on here! Have a wonderful day and more thoughts to come.