Worker’s Compensation, if you have employees you have to have it, end of story! Every week I look through the Rochester Business Journal and under the judgements section, I can always count on there being 8-10 judgements in favor of the New York State Workers Compensation Board against employers that failed to obtain or maintain Workers Compensation Insurance. The average judgement I see is $21,000. Yikes!
It doesn’t matter if your employee is part-time, full-time, temporary, seasonal, or a day laborer. You are required to have Workers Compensation Insurance, as well as Disability and Paid Family Leave Benefits.
I can guarantee you that it’s easier and more cost-effective to get the proper insurance covering your employees than dealing with a judgement from the Workers Compensation Board.
My guess is that some of these judgements are the result of a business trying to classify someone as an independent contractor instead of an employee.
The Workers Compensation considers the following factors when determining if someone is an independent contractor or an employee:
- Perform the service free from direction or control, you don’t get to tell them how to do it, just the desired result that you want.
- They have their own Federal Employer Identification Number (FEIN)
- Maintain a separate business establishment
- Perform work different from that of the hiring business and works for other businesses
- Is in a position to succeed or fail if the business’ expenses exceed its income
- Obtain their own liability insurance policy under its own legal business name and federal employer identification number
- Have recurring business liabilities and obligations
- Advertise their own business
- Provide all equipment and materials necessary to fulfill the contract
- Work under their own operating permit, contract or authority.
If you are uncertain if someone should be classified as an employee or independent contractor, you can contact the Workers Compensation Board directly for a determination.
I hope you found this tip helpful. If you would like us to help you with your Business Insurance, give us a call 585-663-2004.
