Independent contractors are not your employees and you are not required by the law to pay workers compensation to them. However, the answer to the question of whether you need to pay workers compensation to contractors is a tricky business.
For one, employers often misclassify some of their employees as contractors. Thus, if you are unsure whether you need to pay workers compensation to a worker, it is best to classify him or her first. The best way to differentiate an employee from a contractor is to evaluate the level of control you have as an employer over how he or she does her work. As an employer, you can control an employee's work process, location, and time. When you do not have this control, you have hired a contractor. He or she works in a different location, using his or her own equipment, and they may also work for another employer aside from you. By using this classification, you can determine whether you need to pay for workers compensation or not.
Certificate of Insurance
Still, to protect yourself from future liabilities, you can ask the contractors to provide a certificate of insurance. If you work with an independent contractor (IC), the agency should be the one to pay for their employees' insurance. It is best to ask for an up-to-date insurance certificate to make sure that the contractor's policy is still in effect as they perform their services for you. This is crucial if you work in a high-risk industry like construction or coal mining.
IC's Workers Compensation
Even more, ICs who work without employees need to have workers' compensation insurance for themselves too. Business owners or self-employed individuals rarely get an insurance policy for themselves. Thus, to prevent being held liable should they get injured in the workplace, you can require them to show their own insurance certificate.
Even if you are not required to pay workers compensation to contractors and independent contractors, it is best to establish transparency from the beginning. Clearly distinguish your own employees from someone else's employees. Remember that you are required to pay for your employees' insurance premium, but not for contractors. However, to prevent future liabilities, you need to ensure that the independent contractors and their employees carry insurance policies while they render their services to you. You should implement strict rules about insurance and workers compensation, especially if you work in high-risk industries wherein injuries happening on the job are an unfortunate, and costly, reality. Contact a workers compensation lawyer when you have questions about what you are legally obligated to do.
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29 August 2017
My name is Noni. When I was in college, I was hit by a car while crossing the street. My life was never in danger, but I did break a few bones and had a lot of huge medical bills. I was hoping I wouldn't have to get involved with an attorney, but unfortunately, it came down to that. I used a family friend who is an accident attorney to get some compensation. A few years later, I was hit while riding my bike and had to go through the same process. I suppose I'm lucky to be alive. And it's thanks to accident attorneys that I have been able to put my life back together. I started this blog as a way to let others know just how much lawyers can help you in certain situations.