Most businesses have many interests that must be protected at all costs to prevent failure and financial ruin. One example of such an interest is the wellbeing of workers hired by a business, especially if the workers are classified as employees. In the state of Massachusetts, all employers must have workers compensation insurance. While this may seem like a fairly straightforward rule, many business owners in Longmeadow, MA are unsure whether their independent contractors should be covered by a workers compensation policy.
Do Longmeadow Independent Contractors Need Workers Compensation Insurance?
Workers compensation insurance refers to an insurance program that is mandated by the state of Massachusetts. The purpose of a workers compensation policy is to help cover the costs of medical treatment and loss wages for workers who suffer injury or illness while on the job or in the workplace. In some cases, workers compensation policies also help cover the cost for services that employees can take advantage of to speed up the recovery process and return to work. Also, a workers compensation policy can help cover legal fees and other costs associated with lawsuits filed by employees against the business.
All employers in Longmeadow, Massachusetts must cover their employees with a workers compensation policy. The same holds true for all employers in just about every state in the country.
Do Your Independent Contractors Need Workers Compensation Insurance?
Since independent contractors aren't classified as employees, many business owners have wondered whether they need to cover these workers with an insurance policy. According to Massachusetts law, businesses do not need to cover independent contractors. Workers who usually don't need coverage can include taxicab drivers, professional athletes, real estate agents, salespeople, part-time domestic workers, and seamen.
Prior to the passing of the Independent Contractor Law, many employers took advantage of a loophole that involved improperly classifying employees as independent contractors to avoid paying for a workers compensation policy. Not only has the Independent Contractor Law made it more difficult for a worker to qualify as an independent contractor, but it has also introduced penalties for improper classification. Therefore, before you decide not to cover your independent contractors with an insurance policy, it is vital that you ensure your independent contractors are not employees.
Should You Provide Coverage for Your Independent Contractors in Longmeadow?
While some business owners know it is not necessary to provide coverage for their independent contractors, some wonder whether they should get coverage in spite of the fact. Some experts recommend that businesses buy a workers compensation policy even if they don't have employees. Many businesses don't get an insurance policy and end up finding out after a workplace injury or illness that the individual they thought was an independent contractor is actually an employee. If you want to get an workers compensation policy for your independent contractors just to be safe, you can always get a minimum policy premium.
An alternative that will also give you better peace-of-mind is only hiring independent contractors who have a workers compensation policy. Before you hire the independent contractor, you should have them provide you with a Certificate of Insurance as evidence of coverage. Ensure that you have the independent contractor renew the Certificate before the policy expires. If you have employees covered by a workers compensation policy, the Certificates may also prevent you from having to pay for the independent contractors as well.
Matters related to workers compensation insurance are treated very seriously in Longmeadow, MA. Therefore, you want to ensure you have sufficient coverage for your employees, whether they are employees or independent contractors.