Understanding who is considered an employee for workers' comp is crucial. By law, anyone working under your direction is considered an employee for workers' comp purposes. Independent contractors are generally exempt from workers' comp insurance as they are not traditionally considered employees.
Under the law, an 'employee' is broadly defined to include anyone working under your direction. This includes:
These workers are generally considered your employees for workers' compensation purposes, meaning you are responsible for carrying workers' comp insurance that covers them.
The definition above is quite comprehensive and technically can extend to independent contractors. However, independent contractors are typically exempt from workers' comp requirements because they are not viewed as traditional employees. This exemption is based on the idea that independent contractors operate their own businesses and, therefore, are responsible for their own workers' comp insurance.
Note: It's important to understand that, despite legal classifications, employers can still be held liable for injuries sustained by independent contractors while performing work for them. This potential liability makes it critical for business owners to consider workers' comp coverage even for those not legally defined as employees.
Volunteers, by definition, offer their services without the expectation of compensation. Due to their unpaid status, they are typically not covered by workers' compensation insurance.
However, there are exceptions, particularly for nonprofit organizations. Some states have provisions that allow nonprofits to extend workers' compensation coverage to volunteers, recognizing the valuable contributions they make.
On the other hand, volunteers at for-profit entities are generally not covered by workers' comp, as the assumption is that for-profit businesses should not rely on unpaid labor for operational needs.
Interns present another unique scenario. Their coverage under workers' compensation largely hinges on whether they are paid and the context of their internship. Unpaid interns who are gaining experience or receiving school credit without monetary compensation might not be covered under workers' comp. This is because the traditional employer-employee relationship, which is usually a prerequisite for such coverage, is absent.
On the other hand, paid interns are often treated like regular employees, which would make them eligible for workers' compensation coverage. The rationale is that once an intern is paid, they are similar to a traditional employee, and therefore should be afforded the same protections.
Failing to carry adequate workers' comp insurance can have serious consequences. If an uninsured worker is injured on the job, your business could be held responsible for their medical expenses and lost wages.
Moreover, penalties for non-compliance with state workers' comp laws can be severe, ranging from fines to criminal charges, depending on the state. Take it from us, you don’t want to find out the hard way!
Given the complexities of workers' comp laws and the potential for liability, it's advisable for business owners to be proactive in understanding their coverage needs. This means not only having a policy but knowing the law and making sure your entire workforce is properly covered.
The experts at Kickstand can help you to determine your coverage needs accurately. They can also assist in addressing any gray areas related to workers’ comp and ensuring that your business is protected from any potential liabilities.
Get your instant quote now to start a conversation and ensure your compliance with workers' comp requirements.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.